Woes spill over to Splendid
Co. writes off Kirch debt, readjusts 2001 losses
Splendid is writing off part of the $4.8 million it's owed by Kirch, and this has forced it to readjust its 2001 figures, released last month, to up net losses by €5.8 million ($5.1 million) to $7.7 million. Company's total revenues of $61 million for last year remained unchanged.
Kirch still owes Splendid for a film package it acquired last year. Bundle includes "Traffic" and "Gangs of New York," which were passed on to Kirch's ProSiebenSat 1 broadcasting group.
While Kirch Media management has assured Splendid it will pay for the pics, Splendid said there is a degree of uncertainty.
According to Splendid, rights to the films would be returned if Kirch reneges on payment, even partially.
It's the second time this year Splendid has been hit by another company's troubles. In March it was forced to write off $14 million after shares it held in German film group Internationalmedia plunged due to that company's failed merger with Spyglass Entertainment and the introduction of new accounting standards. Splendid shares were selling at $1.42 Tuesday, up 1.2% from Monday.
Fellow Neuer Markt company VCL Film + Media, meanwhile, said Kirch Media's insolvency has had no negative effect on its business.
Company announced Tuesday it had cut its liabilities by $44 million, with a further $30 million reduction in the works. Over the past year the Munich-based license trader has managed to slash its debt by $142 million. Company stock saw a 14% boost in early trading Tuesday before settling at 98¢.
