Jordan and his backers to gain from €40m sale

Formula One team boss Mr Eddie Jordan and Merrion Stockbrokers are set to benefit from the €40 million sale of Jordan Grand Prix to Canadian-based Russian billionaire Mr Alex Schnaider.

Jordan Grand Prix and Mr Schnaider's group, Midland, confirmed yesterday that the deal had been agreed. Neither side revealed the selling price, but sources yesterday valued the transaction at €40 million.

It is understood the valuation takes into account the fact that Midland will shoulder Jordan Grand Prix's €15 million debt.

According to the most recently available figures, Jordan's debt stood at €12 million at the beginning of 2004. It is estimated to have increased by around €3 million since then.

Mr Jordan holds 50.1 per cent of the company. Merrion Stockbrokers and a group of Irish investors hold the balance of the company.

The firm bought the stake on behalf of itself and the other investors for around €10 million in October 2003 from investment bank Warburg Pincus.

While there were no indications of how the cash portion of the purchase price was divided between shareholders, The Irish Times understands that Merrion and the other shareholders will profit from the sale.

Various high-profile Irish business people were linked with the purchase of the Warburg Pincus stake. However, one source yesterday said that none of these reports was fully accurate.

Mr Jordan will keep some of the company's property assets and will continue to have a commercial role in the business, although he will no longer be responsible for running it.

It will continue to race under the Jordan banner for 2005, but next year will be known as Midland F1.

Midland announced yesterday that it had appointed Dr Colin Kolles as managing director and Mr Christian Geistdoerfer as marketing director.

Dr Kolles ran two successful Formula 3 racing companies, Kolles Racing and TME Racing. Two-time World Rally Champion Mr Geistdoerfer ran two sports marketing agencies, Prodrive and P&W Consulting.

Midland Group is based on the Channel Island of Guernsey and has interests in locations as diverse as Armenia and Serbia. The company lists its main activities as steel, shipping, real estate, manufacturing and agriculture.

It specialises in building up businesses in remote, high risk and underdeveloped regions. The conglomerate is controlled by Mr Schnaider.

British Formula One supremo Mr Bernie Ecclestone introduced Mr Schnaider and Mr Jordan. The Irishman said yesterday in a statement that he "wholeheartedly believed" that Midland's investment would make the team stronger.

"The sport and the required resources have changed and this deal provides the team with the security and strength it needs," he said.

One commentator said that the sale reflected the fact that in Formula One, independent operators face unrelenting competition from the industry-backed teams.

"It's very difficult when you're an independent owner and you're up against the big boys," he said.

Mr Jordan was born in 1948 and has been involved in motor racing at various levels for 35 years.

He established Jordan Grand Prix in 1990 and it won its first title in 1998.

One of its drivers, Heinz Harald Frentzen, came third in the championship in 1999.

However, since then it has endured a costly court battle with Vodafone and has had difficulty getting sponsorship.