He added: "One [of several] aspect[s] of the intended refinancing of the F1 bond was to allow for dividends to be paid out."This didn't happen during the brief period that two German media companies, EM.TV and Kirch, held majority stakes. The terms of the deal restricted FOA, which makes the bond repayments, from declaring dividends, and hence its profits began accumulating in the company's reserves.However, a source close to FOA said it was always intended that the bond would be refinanced and the board would have had to vote on this. Since then, 75 per cent of its ultimate parent, SLEC Holdings, has been sold raising $2bn for Bambino.Before Bambino began selling off stakes in SLEC, it had already lined its pockets in 1999 with a $1.4bn bond secured on the next decade of revenues from F1. Company documents show that FOA has not paid a dividend since it was incorporated in 1999. And Gerhard Mann, previously head of Bayern's London office, has been installed as chief executive of Formula One Holdings (FOH), the parent company of FOA.The banks have $1.6bn secured on the F1 business and now hope to get some of this back. One of these, Germany's Bayerische Landesbank, has in effect taken control of Formula One Administration (FOA), the company that runs the high-powered sport. The bank was given clearance by the European Commission earlier this month to acquire control of Speed Investments, the vehicle holding its SLEC share, from the US banks Lehman Brothers and JPMorgan. The latest accounts show $460m (£260m) available to them, with $150m due to Bambino, Mr Ecclestone's family trust.
Bambino owns 25 per cent of SLEC, F1's ultimate holding company, with the remaining 75 per cent in the hands of three banks. "This is part of the uneven playing field we face across the Atlantic," said a spokesman for a top European airline.. The banks that have been at daggers drawn with the Formula One impresario Bernie Ecclestone for three years have finally secured the power to get some money back from their investment. "If they stop covering for passengers themselves, we cannot fly without that cover," said a spokeswoman.The International Air Transport Association and the Association of European Airlines are both lobbying the European Commission to step in to underwrite any cover to keep airlines flying.The US administration already provides this protection for American airlines.
The current draft would leave insurers not liable for either hulls or passengers in the case of "hostile detonation of any device employing atomic and/or nuclear fission" and the "hostile use of radioactive contamination".This would mean the insurers were not liable for any damage caused to aircraft by a dirty- bomb attack.A leading insurer said that this was sheer economic necessity, as a nuclear or dirty bomb at an airport could cause billions of pounds of damage and bankrupt an insurer.But British Airways is among the airlines that fear they could be grounded if this threat were carried out. This could be as high as £100m and could bankrupt many small airlines.However, the situation is threatening to get worse. In June, underwriters at Lloyd's of London formed the Aviation Insurance Clauses Group, which is pushing though changes to the wording of standard insurance policies.One of these proposals involves "war, hijacking and other perils". The problem emerged earlier this year when a group of London-based insurers, which dominate the aviation market, started withdrawing cover for aircraft "hulls".This has left several airlines in the position of being liable for the cost of replacing an aircraft damaged in a terrorist attack. They are now saying they may also refuse to pay out for death or injury caused to passengers in such an attack. In this scenario, planes would not be allowed to fly, as the Warsaw convention covering civil aviation requires passengers to be insured under the airline's own cover. But it is thought that he made the donation specifically because he wanted to even up the general election battle between the Liberal Democrats and the wealthier Labour and Conservative parties.The Liberal Democrats have always maintained that they acted "in good faith" and correctly The party declined to comment on the latest probe HSBC declined to comment.. Many leading insurers have already told airlines that they are going to exclude damage to aircraft caused by nuclear weapons and so called dirty bombs - chemical explosives that spread radioactive contaminants - set off by terrorists.
