Heavy financial question about CVC

[Derek Smith]

Lehman Brothers own shares in F1. This I do not see as much of a problem as CVC can, I believe, block their sale or being passed to any other concern. However, Lehman owns (or is that controls?) half of its debt, which is silly money with lots of noughts.

So what does this mean for CVC?

[Scuffers]

Derek Smith said:

Lehman Brothers own shares in F1. This I do not see as much of a problem as CVC can, I believe, block their sale or being passed to any other concern. However, Lehman owns (or is that controls?) half of its debt, which is silly money with lots of noughts.

So what does this mean for CVC?

not sure I understand your point?

if they had a share holding in CVC, then that will be in the assets to be picked over...

I would suggest as they will not be 51%, it makes little odds who owens them to CVC..

[Derek Smith]

It's more the debt than the shares that confused me over its impact on CVC.

[zac510]

I'm no lawyer or economist dude but it seems like the 'Chapter 11' laws would protect the clients and businesses of Lehman Bros for 12 months.

[35secToNuvolari]

http://www.grandprix.com/ns/ns20780.html

not sure if you've seen that. the last sentence mentions the possibility for cvc to renegotiate the debt and find another lender.

[Derek Smith]

35secToNuvolari said:

http://www.grandprix.com/ns/ns20780.html

not sure if you've seen that. the last sentence mentions the possibility for cvc to renegotiate the debt and find another lender.

I was aware of it. However, I don't know the implications for CVC in the present credit desert. Is it possible that the interest rate might soar through the roof? Can the lender impose conditions? That sort of thing.

[35secToNuvolari]

I would guess that CVC would only renegotiate the terms if Lehman needed cash quickly, in which case CVC would buy its debt back at a discount. If they ply the credit waters it would be with a smaller loan. Is it possible that CVC's debt is bought by someone else who confronts them with new terms? How would they do that? CVC already has the money. I don't know if that's more likely than other scenarios. In my imagination it isnt.

They would run into a crappy credit market if they needed to borrow money to buy Lehman's shares. Although, the Mid East has a many investment funds flush with cash interested in helping F1.

I would say that CVC should be concerned about the revenue side of things which could be affected by the likes of Bernie, the lack of a concorde agreement, and a regulator neutering the sport.

[GBRM]

What happened when the German (IIRC) company who owned the rights to F1 went bust a few years ago? Didn't BCE (through one of his many companies) negotiate the right to buy back the shares at a reduced rate that had been written into the original contract?

I'll check pitpass.com, there must be something on there about it.

[skeggysteve]

GBRM said:

What happened when the German (IIRC) company who owned the rights to F1 went bust a few years ago? Didn't BCE (through one of his many companies) negotiate the right to buy back the shares at a reduced rate that had been written into the original contract?

Thats sounds like a Bernie deal!

GBRM said:

I'll check pitpass.com, there must be something on there about it.

I'd be very surprised if there isn't something on there

Back to Derek's question - I think that the original deal will have taken bankruptcy/Chapter 11 into account.
This Bernie we are talking about and he has made very few mistakes where £'s are concerned.