Tuesday, September 29, 1998 Published at 07:31 GMT 08:31 UK
Business: The Company File
F1 float back on the starting grid
TV rights to Formula One are worth £180m a year
Formula One motor racing is launching a $2bn (£1.2bn) Eurobond offer as a step towards floating the business on the stock market.
The bonds will be backed by revenue from live sports broadcasting.
The main beneficiary of the bond issue will be Slavica Ecclestone, wife of the entrepreneur Bernie Ecclestone who controls Formula One.
Mr Ecclestone has put his interest in the sport in a family trust, in which his wife has a major interest.
Mr Ecclestone said: "This transaction is good news for Formula One as it paves the way for the company's flotation.
The plan had to be shelved when the European Commission launched an investigation into the marketing contracts between Mr Ecclestone's companies and the sport's governing body and television broadcasters.
The TV rights to Formula One are worth around £180m a year.
There were also disagreements between Mr Ecclestone and Formula One teams over sharing revenue and team stakes in the floated company.
These have since been resolved by the signing of a "Concorde" agreement detailing the commercial relationship between the teams and Mr Ecclestone's companies.
Fast track solution
Formula One Finance, the company set up to organise the bond issue, said talks with Europe's competition watchdogs were "proceeding satisfactorily" and that the European Commission's worries had "now been, or can be, dealt with".
Spokesman Stephen Mulles said there were "a few minor issues" to be resolved but the Commission had "a good understanding of the business now".
Once the investigation is complete, Formula One plans to go ahead with a full flotation and use the money raised to redeem the bonds.
The flotation is expected in "two to three years".
The bonds can be redeemed after two years, but include a substantial increase in the interest rate after five years.
The bond offer, which is being managed by Morgan Stanley Dean Witter, is expected to receive a top rating from investment experts.
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