Kirch Banks Could Reclaim F1 Stake by End of June

Kirch's creditor banks could reclaim the indebted media group's majority stake in Formula One by the end of June, said the chief executive of Bavarian bank BayernLB.

Werner Schmidt told reporters late on Thursday that he valued the Formula One business as a whole at four to five billion euros ($3.63 to $4.53 billion).

The bank, which under the control of the Bavarian government became Kirch's main supporter and biggest lender, gave the group a one billion credit to buy a 58 percent stake in Formula One holding SLEC for $1.6 billion last year.

U.S. investment banks JP Morgan and Lehman Brothers each lent Kirch $300 million and the three held the F1 stake as part collateral for more than $6.8 billion in loans extended to the media group.

The Formula One collateral includes 58 percent of SLEC owned by Kirch plus 17 percent held by former owner EM.TV & Merchandising AG.

Schmidt said the banks were already in negotiations with Formula One supremo Bernie Ecclestone, who owns the remaining 25 percent of SLEC, and the carmakers, but there was no concrete schedule yet.

BayernLB said on Thursday it had hired former Deutsche Bank executive Thomas Fischer to help Kirch's creditor banks sell the stake in Formula One to the carmakers.

"We want to transfer the Formula One rights to the carmakers or to Ecclestone or to a third party," said a spokesman.

SLEC has a 100 year deal with the International Automobile Federation (FIA) for the commercial rights to Formula One.

But the main carmakers in Formula One - DaimlerChrysler, FIAT, Ford, BMW and Renault - have taken the first steps to setting up their own championship from 2008 when an agreement between teams, the FIA and Ecclestone expires.

Juergen Hubbert, head of DaimlerChrysler's Mercedes car division, said last month that it would only make sense for the carmakers to take a stake in SLEC if their demands were met. These include guaranteeing free-to-air television and granting carmakers a say about the race calendar and venues.