Formula One is relying on its auto-racing dominance in Europe and a welcoming loan market to slash borrowing costs even as its chief executive may be charged with bribery and private-equity owners pull cash from the business.
The racing company is asking lenders to lower rates it agreed to pay eight months ago in exchange for permission to sell $1 billion of junk bonds that financed a dividend to CVC Capital Partners Ltd. and other private-equity owners. Chief Executive Bernie Ecclestone has been under investigation by German prosecutors for a bribery case tied to Bayerische Landesbank’s sale of a stake in the company to CVC.
James Olley, a CVC spokesman who works at Brunswick Group LLP in London, declined to comment on the company’s financing or any plans for Ecclestone to step down from his role as CEO.
The company’s shareholders will take another dividend of $332 million this year using cash on hand, according to Cooke. Senior lenders agreed last year to the dividend payments, he said.
“It was a very good deal for the shareholders,” said Heijnen. “It was not a good deal for the sport.”