MUMBAI: London-based CVC Capital Partners, the largest shareholder in motor racing co Formula One, has cut down its holdings by selling 21 per cent stake to three nstitutional investors in cash for equity deal valued at $1.6 billion.

The three institutional investors are BlackRock, Waddell & Reed, Norges Bank, the asset management unit of the Norwegian central bank.

Waddell & Reed said it had invested $1.1 billion through its Asset Strategy mutual funds and separate accounts. Norges Bank is believed to have contributed around $300 million and BlackRock the remaining $200 million.

The development comes ahead of the Formula One?s planned $3 billion initial public offering in Singapore which is expected to debut in June this year.

According to Finance Asia, the transaction gives Formula One an enterprise value of about $9.1 billion including $7.2 billion of equity and $1.9 billion of debt.

Commented CVC Capital Managing Partner Artner Donald Mackenzie, "This is great news for Formula 1 and an important step in its development. CVC became the controlling shareholder of Formula 1 in 2006. Since that date we have supported the company and its management as they have grown the company with great success. The addition of these three highly regarded investors to our share register is validation of this success, and we look forward to working with our new partners over the coming years."

It is believed that the private equity and investment advisory firms stake has come down to about 40 per cent from 63.4 per cent following the stake sale.

CVC said it will continue to be Formula One?s largest and controlling shareholder even after the stake sale.