Deutsche Bank has given the failed Kirch media group three months to sell its stake in the Axel Springer Verlag newspaper publisher and repay its 720m euros debts.

The loan is secured against the 40% stake in the publisher of the top-selling Bild newspaper.

If Kirch fails to pay the debt on 30 August, the bank is expected to demand that the Axel Springer shares are handed over.

Deutsche Bank would then be expected to sell the shares via the stock market.

Buying time

The extended debt repayment deadline is part of a settlement agreement between the bank and the media group.

The deal, which was agreed in a Munich court, ended a lawsuit by Kirch aimed at stopping efforts by Deutsche from taking over and selling its Springer shares.

In dropping the case, Kirch bought time.

The main part of Kirch has filed for bankruptcy, sunk by a failed push into pay-TV and sports broadcasting rights marketing.

Other creditors

Kirch has debts beyond the Deutsche Bank liabilities.

It also owes 1.6bn euros to Bayerische Landesbank, Lehman Brothers and JP Morgan Chase.

Deutsche Bank has first call on its assets. The others are not expected to be able to reclaim much of the cash they lent to Kirch to enable it to buy TV rights to Formula One races.