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It has been clear for some time that the proposed £6bn flotation of Formula One on the Singapore stock exchange will not take place any time soon. Not only are the world's stock markets in the doldrums but F1's boss Bernie Ecclestone and the sport's biggest shareholder CVC are being increasingly dragged into a bribery scandal in Germany and numerous Grands Prix are facing financial difficulty.
The flotation was initially due to take place in June but the shaky economic climate put the brakes on this and it was first delayed until later this year and then to next year when it became clear that there was not enough time to get it off the grid in 2012. On Tuesday this week the inevitable was finally revealed when Pitpass' business editor Christian Sylt wrote in the Daily Telegraph that CVC has delayed the float to 2014.
The article quoted a source close to CVC saying that the float will not take place next year and Pitpass then confirmed this with Ecclestone himself who told us that it "will be in 2014 probably. All the floats that have tried to get out there haven't happened and I don't know whether the market is going to change." It is what seasoned F1 analysts were expecting with one commentator saying that there was "no real surprise there."
Reuters' F1 correspondent Alan Baldwin has now followed up the news and Ecclestone told him on Thursday that "in my opinion we ought to (forget about 2013). I should think by 2014 the world will have sorted itself out a little bit better."
However, it remains to be seen whether the float will even take place in 2014. Reuters' follow up piece missed out a potentially crucial piece of information which was in the original report and this is that the CVC source said "it is hard to tell depending on what happens with the markets but I think 12 to 18 months is probably a realistic time-frame." This further narrows the window that the float could take place in 2014 as 18 months takes us to May that year. If conditions are not suitable then there would only be a limited amount of time to reschedule the float later in the year.
As the CVC source revealed to Sylt, it does not need to float F1 and the reason for this is that the sport will get a £625m loan to pay to its owners. CVC also raised £1.3bn from selling a 28.3% stake in F1 earlier this year so this further reduces the pressure to float.
Bearing this in mind, one wonders whether it would be better for CVC to say that the float is no longer on the table as at least there would then not be any expectation about when it will take place. The repeated delays do not put F1 in a particularly positive light and just make it look more likely that Ecclestone will be proved right when he said two years ago that "it wouldn't float under me."
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