F1 floatation: The next move

(01-Oct-98) - Another step has been taken towards the flotation of F1 on
the stock market.

A newly-incorporated company, Formula 1 Finance, will issue a Eurobond
later this year. The Eurobond offer, worth $2 billion (œ1.2 billion), means
that Bernie Ecclestone is raising money on the potential profits of Grand
Prix racing, which are mostly related to television rights.

This represents a change of tack for Ecclestone. His original flotation
plans would have meant the sale of shares in his F1 businesses. The issue
of a Eurobond, which is expected to be listed on the London Stock Exchange,
means that no equity changes hands. Instead, a dividend will be paid to
bondholders for a finite period.

"This transaction is good news for F1 as it paves the way for the
company's floation," said Ecclestone.

A spokesman for the companies handling the bond issue claimed that the
flotation of F1 was only two or three years away.

Plans for the flotation of F1 were dropped last year when the European
Union competitions minister Karel van Miet launched an investigation into
the governing body of motorsport, the FIA. This included a probe into the
governing body's multi-year agreement with Ecclestone's companies to run
F1.

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