New SLEC/GPWC company will include 'F1 banks'

An entirely new company is to be formed to control the commercial exploitation of F1 racing, according to a German newspaper this morning, owned jointly by rights holder SLEC Holdings and the manufacturers supporting the GPWC initiative. Contrary to earlier reports, GPWC will not simply acquire the 75 percent stake in SLEC held by the 'F1 banks', states Süddeutsche Zeitung. Instead, the banks will retain the shares within the framework of the new company

New SLEC/GPWC company will include 'F1 banks'

Last week [Dec 5] the five manufacturers that created the 'Grand Prix World Championship' company - BMW, DaimlerChrysler, Ferrari, Ford and Renault - were widely reported to have reached an agreement to purchase the SLEC shares held by Bayerische Landesbank, JPMorgan and Lehmann Brothers. However the three banks, which acquired the stock as a consequence of the failure of Kirch Gruppe, the German media corporation, had previously rejected GPWC's offers as inadequate. It now appears that they have decided to retain their stake under this new arrangement, in order to recoup their Kirch losses over the long term.

For the banks and Bernie Ecclestone, the principal of the Formula One group of companies whose family trust, Bambino, holds the remaining 25 percent of SLEC, the deal described by Süddeutsche Zeitung would remove the threat of a 'breakaway' series in 2008. This threat has been posed since GPWC was formed for that purpose. Such a split would certainly have reduced the value of SLEC and might even have rendered the shares ultimately worthless.

For the manufacturers, this deal would secure a direct interest in F1 for the companies that own some of the teams and supply their engines and other hardware. There has been no indication as to whether Honda and Toyota might also be involved in the new company.

On Wednesday this week, Ferrari president Luca di Montezemolo called for Ecclestone to remain at the head of any organisation controlling the rights to F1 [Dec 11]. "We need him more than ever to run the business because it's owned [sic] by the banks," he said.

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