Lehman Bros creditors set for F1 sale windfall
Creditors of Lehman Brothers are set for a financial windfall after the US bank, which collapsed in 2008, announced it is selling its stake in Nasdaq-listed Formula One motor racing.
The payout is expected to be $1.5 billion, from an original loan of $300 million that Lehman gave German media firm Kirch in 2002 to finance its purchase of shares in the sport.
When Kirch went into Chapter 11 bankruptcy in the same year, it left Lehman with a 14.2-per-cent stake in F1. Four years later, Lehman sold its stake to CVC for $209.3 million, a loss on the loan but quickly reinvested the money to up its stake to 15.1 per cent.
In 2008, Lehman itself went into Chapter 11 bankruptcy and moved its F1 stake from its bankrupt arm, Lehman Commercial Paper, into LBI Group, a newly formed holding company containing the valuable assets in its portfolio.
Over time those assets are being sold off to pay Lehman’s creditors.
The offering also ends erstwhile Formula 1 promoter Bernie Ecclestone’s time as a shareholder. He is selling his remaining stake for $20 million. Together, Ecclestone and his Bambino family trust have made an estimated $4.9 billion from dividends and the sale of their shares.
US media giant Liberty took control of Formula 1's parent company Delta Topco at the turn of the year from former owner CVC Capital Partners in a deal that put the enterprise value of the sport at $8 billion.