Highlights

A1 Grand Prix founder to sell stake

(Reuters)
Updated: 2006-09-30 09:28

A1 Grand Prix founder and chairman Sheikh Maktoum Hasher Maktoum Al Maktoum of Dubai is selling his stake in the self-styled 'World Cup of Motorsport', organisers announced on Friday.

"I am happy that I have built the series with fans in mind," he said in a statement issued by A1.

"I feel like I have fulfilled my promise to them by bringing A1GP from concept to reality and am confident that the World Cup of Motorsport will go from strength to strength."

Organisers said Maktoum was releasing his majority stake in a multi-million dollar transaction that would "permit a broadening of the institutional shareholder base ahead of a planned initial public offering."

Maktoum, who launched the global single-seater series last year with the initial aim of filling the European winter months between the end and beginning of the Formula One season, said the sale would allow him to devote more time to his Dubai International Holding Company.

A1 said the all-cash transaction was expected to be completed within 30 days, after which Maktoum will step down as Chairman and Director of the series.

Maktoum had predicted that A1 could become a "two billion pound business" by year two but the series, with 25 national teams competing in 11 races on six continents last year, made heavy losses in its first season.

CASH LOSSES

Executive director Richard Dorfman confirmed in July that cash losses were in excess of $100 million, but considered that inevitable for a start-up. Others put the figure at more than twice as much.

The series engaged Japanese brokers Nomura last May to raise an institutionally-targeted debt financing before a float, a move Dorfman said was intended to add $500-600 million to the coffers.

The new season is due to start at Zandvoort in the Netherlands on Sunday, with more than 100,000 tickets already sold according to organisers.

However, the final 12 race calendar, confirmed only on Wednesday, gave a hint of Maktoum's intentions with no round scheduled for Dubai.

Instead the other locations are the Czech Republic, China (two races), Malaysia, Indonesia, New Zealand, Australia, South Africa, Brazil, Mexico, and Britain.

The cars, less sophisticated and slower than Formula One racers, are painted in national colours and provided to 'seat holders' on a franchise basis.

Each country has one car on the starting grid and drivers must be citizens of the nation they represent with points awarded to countries and not individuals. France were the inaugural champions.