Prisa, one of Iberia's major media groups and publisher of one of Spain's leading newspapers, El País, is now having to fight its way out of a debt crisis. If its financial advisers and lawyers fail to find a solution, the press giant, controlled by the Polanco family, could be broken up, say lawyers.

The crisis is a direct result of Prisa launching a mandatory bid to buy out the other shareholders of pay-TV operator Sogecable, as it had exceeded the 50% holding threshold. The bid offer, launched last December, has now proved to be a tactical mistake, say some commentators.

A syndicate of banks, led by HSBC, provided a €4.2bn syndicated bridging loan to cover the cost of acquiring the outstanding stock but Prisa expected to need only €2. 5bn, say those with knowledge of the deal. Prisa had assumed that Telefónica, with a 16.8% stake, would not tender into the offer. Nonetheless, witnessing Sogecable's falling stock price and raised doubts about potential future advertising revenues, it sold.

Prisa already had a €2bn loan outstanding that was advanced in 2006 to acquire Portuguese company Media Capital. With total borrowings now exceeding €5bn, Prisa found itself in breach of a debt to net asset value covenant tied to the first loan.

Prisa has now managed to negotiate an extension to the bridging loan while it embarks on an emergency sale of assets. It has already agreed a €315m sale and leaseback deal with Longshore (Drago Real Estate Partners) for the three headquarters buildings of El País, Cinco Días and Radio Barcelona, while another PE fund, 3i, has taken a 17%, €225m stake in subsidiary Unión Radio.

All eyes are now on a probable auction of Digital+, the pay TV channel with two million clients that was acquired along with Sogecable. Telefónica, BSkyB, ONO, Vivendi and France Telecom's Orange are all reportedly interested. Disposals of part of Media Capital and all of Locali, Prisa's local TV network, are also possible.

Meanwhile in Portugal, Italy's RCS Media Group has sold off its publishing subsidiary Económica, owner of the financial newspapers Diário Económico and Semanario Económico to Ongoing Strategy Investments for €27.5m. Also in action has been Impresa, the listed Portuguese media group, which acquired local magazine publisher Edimpresa from Swiss-based publisher Edipresse for an undisclosed amount.

An upturn in activity across the business sector comes at an opportune moment, say some Iberian communication, media and technology (CMT) lawyers, since the "communications" and "technology" parts of their practices were becoming less active as the sector matures.

In recent months Uría Menéndez has been winning the greater share of work in the sector, but with more auctions of CMT assets and debt refinancings anticipated, Iberian practitioners anticipate that many more firms will be seeing themselves involved in matters.