Ecclestone faces bitter $2bn battle with banks

Click to follow
The Independent Online

Bernie Ecclestone is set to face a $2bn (£1.1bn) writ from three banks that are shareholders in his company, which controls Formula One racing. The legal action could be launched next month.

Bernie Ecclestone is set to face a $2bn (£1.1bn) writ from three banks that are shareholders in his company, which controls Formula One racing. The legal action could be launched next month.

The three banks - Bayerische Landesbank, Lehman Brothers and JP Morgan - ended up with a 75 per cent stake in SLEC, Mr Ecclestone's Jersey-based holding company, after the collapse of German media giant Kirch. It had bought the stake for $2bn from Mr Ecclestone.

Since assuming the holding, the banks have been in a bitter battle with Mr Ecclestone over how the company is run. He has refused to give them any voting rights over SLEC's operating subsidiary, Formula One Holdings.

The banks sued Mr Ecclestone for board representation. A hearing in the High Court started earlier this week and a ruling is expected next month. However, well-placed sources said the banks are to open a second front with further writs. These will seek control of Formula One Assets, another subsidiary which controls the sport's TV rights, and will press for Mr Ecclestone to compensate the banks for the fall in value of their stake in SLEC.

An indication of the fall in value was given by Bayerische, which has the largest stake. Its holding was initially valued at €1bn (£690m), but it was forced by German regulators to write this down to €650m in 2002. In August, Werner Schmidt, the bank's chairman, said that the book value of the shares is now "far lower" than €650m. He did add, though, that "no event can harm us", implying the value had been written down to nearly nothing.

Comments