Formula E racing seeks to woo carmakers ahead of possible IPO

Formula E, a new electric racing series bankrolled with $100 million by Boston Celtics managing partner Wyc Grousbeck and others, wants to seduce sports fans and carmakers with a view to a possible initial public offering.

The series, which opened in Beijing Saturday, uses battery-powered cars made by Villeneuve-La-Guyard, France-based Spark Racing Technology that look similar to Formula One single-seaters, although are slower, don’t have engine roar and require a vehicle change mid-race. Renault SA is a series sponsor and Audi AG, which is backing one of 10 teams, also has “a foot in the door,” Formula E chief executive officer Alejandro Agag said in an interview at the series offices in London.

Luring more carmakers is “very, very important” for the series and representatives from 10 auto companies will be guests in Beijing, Agag said. He declined to identify them, saying he didn’t want to jeopardize confidential negotiations. Carmakers have until Oct. 30 to express an interest in taking part in the second season, he added.

Carmakers will be watching for the public’s reaction and the reliability of the cars, according to Mark Gallagher, who has worked as an auto racing executive for Ford Motor Co. and Cosworth Ltd. After qualifying at noon, the race starts in Beijing at 4 p.m. and will last about an hour.

“They’ll be looking to see whether it can give electric cars the wow factor,” Gallagher said. “If the cars last the full race distance and look quick then it will be very attractive.”

If the batteries die during the opening race on a 2.1-mile street circuit around the “Bird’s Nest” Olympic stadium, it may damp enthusiasm, Gallagher added. So far, there are nine races on the calendar, including events in Berlin, Buenos Aires, Miami, Los Angeles and Long Beach, California.

Among the drivers are two women ― Italy’s Michela Cerruti and Katherine Legge of the U.K ― and former Formula One racers such as Sebastien Buemi of Switzerland.

Enrique Banuelos, a developer who lost most of his $5 billion fortune in Spain’s real estate crash, is the biggest investor and Agag also holds a stake. They raised money from Grousbeck’s Causeway Media Partners among other investors last year, removing the need for a planned roadshow led by Barclays Capital Inc., Agag said.

Investors could hold an IPO in “anything from two to five years” or a sale to a private equity firm, Agag said. The holding company is domiciled in Hong Kong partly for a potential share sale, Agag added.

Formula One, the most-watched racing series whose teams include Ferrari SpA and Daimler AG’s Mercedes, shelved an IPO in Singapore in 2012, citing market conditions. The series was valued at $10 billion that year in a lawsuit filed by Bluewaters Communications Holdings LLC. (Bloomberg)