Debt bottleneck looms

Private equity giants KKR and Permira have hired advisors to counsel them on how to cut the €1.8bn debt held by the firms’ holding company Lavena from their purchase of German broadcaster ProSiebenSat1.

Lavena Holding 4 currently holds 88% of ProSiebenSat1 – Europe’s second largest commercial broadcaster. The company told Reuters that its key priority for 2009 is to reduce the broadcaster’s net debt which rose to €3.4bn in 2008

The firms’ stake in ProSieben is said to have lost more than 90% of its value over the past 12 months and the broadcaster will pay no dividend for 2008. Highlighting the troubled broadcasting market in Germany, Munich-based ProSieben posted a net loss of €129.1m for 2008, compared with a net profit of €35.8m in 2007.