Banks Await EU's Approval of F1 Stake Take Over

Bank creditors of the insolvent Kirch Group are awaiting the European Commission's approval of a deal which will see them exchange the German company's debts into stake in the Formula One commercial rights holdings company, SLEC.

Bayerische Landesbank (BLB) of Germany, JP Morgan Chase Bank (JPM) of USA, and Lehmann Brothers of USA have requested the EU's authorisation to exercise their security rights, following Kirch's insolvency. The three banks have loaned Kirch a total of $1.6 billion (USD) and the current deal will see them exchange the loan with the Formula One stakes.

The European Commission's official journal published a notice of the deal last week, allowing third party observations to be filed in by no later than end of business today. The EU has until October 3rd to approve the deal, or request further probing.

According to the EC's notice, the three banks are requesting to approve their overtaking of "the whole of the undertaking SLEC Holdings Limited ... by way of exercise of security rights in the undertakings Formel Eins Beteiligungs GmbH (FEB, Germany) and Speed Investments Limited (Jersey)."

A spokesman for the European Commission told Atlas F1 the three banks are set to acquire 100% ownership of FEB - Kirch's German company - and 70% of Speed Investments, a company that was originally founded by EM.TV and was later sold to Kirch.

The spokesman added that Speed Investments hold 70% of SLEC. Therefore, the three banks will eventually own 49% of SLEC.

SLEC controls a number of Formula One companies, namely Formula One Asset Management Limited (Jersey), Formula One World Championship Limited (England and Wales), Formula One Administration Limited (England and Wales), Petara Limited (Jersey), Formula One Management Limited (England and Wales), Formula One Licensing BV (The Netherlands), Formula One Productions Limited (England and Wales), and Formula One World Travel Limited (England and Wales).

Once the deal is approved by the European Commission, the three banks are speculated to sell these shares to a third party, most likely to be the automakers involved in Formula One.