This is the second part of our rolling coverage of the saga of where the 2010 British Grand Prix will be held – or if it will happen at all. It covers the period from October 12th to 19th, with the oldest information at the foot of the page. You can find the links to the other part of the coverage down there too.
20:30: Well, this is fun. Donington has announced the name of its candidate for non-executive chairman of its holding company should the bond issue be successful. He’s Sir Rodney Walker, the chairman of the World Professional Billiards and Snooker Association. Anyone with an interest in sports administration will know that this has been a distinctly not-uncontroversial body over the last decade, to say the very least. Catch up on its history here or refer back to our earlier article on sports administration disputes here (and scroll down to the subhead reading ‘Snooker’s Uncivil War’). Sir Rodney has extensive high-level experience in sports administration, including a previous six-year stint at Donington and a spell at Brands Hatch and his name is being associated with the project in a bid to boost its credibility with investors. Gillett says: “His appointment is the first of a few key executive and non-executive appointments we hope to announce in the coming weeks.”
- The Telegraph: Donington line up Sir Rodney Walker to rescue Grand Prix bid
- Nottingham Evening Post: Top name on board at Donington
Monday October 19, 10:30: This morning The Financial Times features a piece talking of Gillett’s optimism that his bond issue will raise the necessary £135 million by its Friday deadline – but in which he “declines to go into detail about how much has been so far raised”. It says he is due to hold another investor roadshow today and that the £12 million shortfall discussed in relation to the previous fundraising bid has been taken up by a ticketing agency in return for the ticketing rights.
Investors’ doubts are said to centre on the circuit’s ability to sell hospitality packages. Of the situation at the track, Gillett says: “For the past eight weeks, we have closed the track, dug it up and got 90 per cent of the the groundwork done. The shareholders have invested to keep the groundwork going. We have a programme designed to get us to where we need to get to for completion.”
The article quotes Chester King of Donington’s hospitality partner SSG saying that he has several years’ experience in selling sports packages and that he feels confident about the project. The article also corrects the paper’s earlier statement that race team McLaren is due to receive preference shares in the Donington holding company – it is now identified as a construction company of that name.
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21:00: James Allen confirms that the entity named McLaren mentioned in the FT story linked to below as set to receive preferred stock in Donington Holdings Plc has been mistakenly identified by the paper as McLaren the race team.
Friday October 16, 13:00: All quiet on the east Midlands front today (in the manner of a duck gliding along on the surface of a pond while its legs paddle frantically under the water, we expect). But, if you’re seeking to understand the financial background to all this, check out this article from Bloomberg.com on the state of the European high-yield bond market. Read it here. Key sentence: “Sales of junk bonds surged in Europe this week on investor demand for riskier assets, spurring Britain’s Grand Prix track operator to tap the high-yield market for the first time.”
Meanwhile, we’re still particularly keen to find out what involvement of McLaren’s (yes, the race team) has earned it the right to be issued shares in Donington Holdings Plc when the bond issue closes next Friday, a state of affairs reported by the Financial Times yesterday. If you spot (or indeed have) any further information on this one, please do post a comment or send an email and let us know. See update at 9pm above.
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20:45: And a second, evening round-up to bring you up to date on the day’s events. Meetings with investors are said to be under way. Autosport reports that Standard and Poor’s, a company that publishes financial assessments and analysis, has rated the Donington bond issue as CCC+ – defined as slightly better than the CCC rating of “currently vulnerable and dependent on favorable economic conditions to meet its commitments”. Read the Autosport story here or find out more about such credit ratings here.
An interesting piece from Reuters.com on the same subject says: “The sale of the notes, expected next week, is the latest low-rated bond to come to the European high-yeld market as European banks remain reluctant to take risks” – read it here.
Thursday October 15, 10:00: Here’s a round-up of the latest coverage:
- Financial Times: Donington sweetens terms for grand prix funds (Mentions that McLaren,
the race team, is set to become one of the shareholders if the issue is successful)
- The Times: Donington carries on regardless of its British Grand Prix snub
- BBC Sport: Donington in final British GP bid
- Sport Business: Donington talks over £135m bond scheme for British grand prix
- Leicester Mercury: £120m race against time for Donington to secure British Grand Prix
- Northampton Chronicle: Circuit in ‘last ditch’ F1 bid
- Business Day: Dilemma for Donington
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20:45: Leading this evening’s first editions is The Telegraph with chief sports writer Paul Kelso’s take on the bonds issue: Donington gamble on raising £120m to beat deadline
1815: The press release made available on the Donington Park website this morning talking about the terms of the bonds issue has now been removed. Click through on the direct link below to see for yourselves.
16:00: James Allen’s written a nice, clear explanation of what is going on for his blog and gets some expert opinion about what weight should be given to the various figures involved. This is recommended reading: Last roll of the dice as Donington offers the City a high risk bond.
The key sentence is this: “One trader said, ‘It’s priced at the higher end of the risk spectrum. It looks a bit last minute and challenging to get done in two weeks unless they have done pre-marketing. Donington must be desperate to do this. The first thing I would want to know as an investor is, what are the cash flows, can the company comfortably afford 20% interest payments to make sure that I get my money each year?’”
13:30: Catch up with media coverage of the latest developments here:
- Bloomberg.com: British F1 Track Donington to sell bonds to finance upgrades.
- The Guardian: Donington Park unveils bond scheme in bid to host British Grand Prix (“An earlier plan to raise cash to fund the redevelopment by selling long-term debentures… has been put on ice until the autumn.”)
- ITV F1: Donington launches fund-raising scheme (“Although the total value of the offering has been set at £135m, the net proceeds are likely to be substantially less since the notes are expected to be issued at a discount to increase the chances of a successful sale.”)
- London Evening Standard: Donington chase cash to save British Grand Prix
- The Times: Donington Park unveils last-ditch plan to stage British Grand Prix
12:00: Notification of the offer has been posted on the venue website here. The recently-created company is listed at Companies House under the number 06989305. It was set up in August this year and started the process of getting the authorisations to trade as a public company a few days ago. It is one of several companies recently set up and listed as based at the circuit, including Donington Development Holdings Ltd, Donington Development No1 Ltd and Donington Development No2 Ltd. Donington Holdings Plc’s directors are listed as Hennah Raza, whose contact details are given on the application to trade as via a London-based legal practice called Field Fisher Waterhouse LLP, and Thomas Pond. On its website this legal practice talks of its experience in the the acquisition of Donington Park Racing circuit with a view to development of a mixed use scheme centred around the racetrack.
Wednesday October 14, 11:00: Donington Ventures Leisure Ltd has just announced that it is launching a high-risk, high-reward bond scheme to raise the cash it needs to fund its redevelopment via the set-up of a new public company called Donington Holdings Plc. It is looking to borrow £135 million through an issue of loan notes that will become due, with interest, in 2016. Autosport has the details here. Before this happened, Damon Hill was doing his calm and measured thing in The Telegraph. Here’s the link, even though events have evidently moved on a bit since that was written.
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13:30: Here’s a small but significant addition to the sum of our knowledge. This article, from the EventMagazine.com website, names a company it says has been brought in to handle the debentures and quotes the circuit saying they will not go on sale “until its future is resolved”.
Monday October 13, 10:00: Yesterday, in the absence of any statement from Mr Ecclestone, we had a strong sense of waiting for the other shoe to drop. And this morning it has. Here he is, in The Telegraph:
“We haven’t decided to give Gillett another deadline at all. We have informed him he is in breach of contract. The contract which we have gives him 14 days to remedy the breach. Most business contracts are like that. “People interpret things the way they want to interpret them. It would be hard if you were standing in a court today arguing what he said was wrong. But he hasn’t been given another deadline at all. He has been given, like the contract says, another two weeks to remedy the breach. No deadline has changed.”
He has added that Silverstone is now in the frame to pick up the entire 17-year contract previously awarded to Donington Park. Read the full story here >> More coverage:
- Financial Times: F1 boss warns Donington on ‘breach’
- Autosport: Ecclestone denies Donington’s deadline
- Pitpass: Ecclestone – Gillett in breach of contract
- Press Association: Silverstone waiting in the wings
- Derby Telegraph: Grateful for extra time in race bid
In essence, the game has changed. But even so, you gotta tip your hat to Gillett for that little bit of coup de theatre last night with which he’s created a passable smokescreen to hide the fact that Formula One Management actually seems to be on the verge of commencing legal action against him. The Guardian, meanwhile, asked Bernie to explain what happens next. :
“‘Donington are in breach of contract and they have 14 days to remedy that breach,’ Ecclestone said. ‘We have an agreement with Silverstone that in the event of a breach we will talk to them and we will be discussing this. “‘Of course it is no good for them [the BRDC] having a one-year job, for sure. We’ll talk to them and see but we won’t return to Silverstone under the same conditions. There’s nothing wrong with Silverstone; the only thing is they promised things that didn’t happen.’”
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17:30: OK, are you sitting down? Gillett has two more weeks to prove to Ecclestone that he can find the money. Ecclestone has not commented. Autosport quotes Gillett as saying the following:
“We can confirm that Donington Ventures Leisure Limited has another two weeks from today to further demonstrate our credentials for hosting the British Formula 1 Grand Prix and to provide full information regarding our financial backing and construction timescales. “We have made great strides in recent weeks and greatly appreciate the additional time allowed to us to finalise the information for public distribution in what has been a much more difficult than anticipated economic climate. “We appreciate the British public’s growing frustration with regard to uncertainty that has been cast over the country’s largest and most successful motorsport event, but remain committed to delivering on the promises that we made at the start of this process and have the interests of the sport and its fans at heart.”
Read the full Autosport story here >>
Fans of TV serials have a term that they use when their show of choice has become so ridiculous that they can no longer continue to view it with any real conviction or enthusiasm. The heel turn of Mrs Vaughn in Alias season three, and the subsequent discovery that Sydney Had A Sister All Along. The X-Files once David Duchovny had moved on. It all stems from this nadir of a once-great television programme and character:
It’s official: this whole stupid saga has now officially jumped the shark.
15:30: We’re watching the tumbleweed blow idly across the dry and deserted news landscape… What do you reckon, gentle readers? Is the Donington rescue package being sold to a willing Mr Ecclestone even as we speak? Is this going to be another one that gets announced well after hours, as on Friday?
12:30: Looking for something to read while you wait for some news? The Mirror sticks it pretty roundly to Donington, Silverstone and the BRDC in its latest opinion piece on the British Grand Prix – and manages to express what a lot of fans think in the process. Read it here – but not while drinking coffee. This motorsport blog of the paper’s looks good, incidentally. We’ll be following it in future.
10:30: Here’s a balloon all ready and set to go up – authoritative news site Pitpass is reporting that wounded pride and cashflow might not be Simon Gillett’s only problems this afternoon. Could Ecclestone sue him for breach of contract? It says it understands he is on the verge of launching legal proceedings against Gillett’s company: “Reliable sources inform us that Ecclestone has already been in touch with circuit owner Tom Wheatcroft to tell him that ‘it’s all over’, while construction company McAlpine is understood to have moved off the site on Friday.” Read the full article here. Also we suggest keeping your eyes peeled to see if Jayne McGivern plays any further role in proceedings.
Monday October 12, 09:00: So, what are we expecting today? Well, the schedule seems to be that Simon Gillett will have a last-gasp bid to tie down his financing and then proceed to a meeting with Ecclestone. So we will undoubtedly have to wait a few hours for any further news. This being F1, anything could happen.
The course of events is popularly expected to involve Gillett being given the bum’s rush by Ecclestone who is then satisfyingly given the bum’s rush by Hill, leaving him to consider the consequences of his incredible rudeness to Silverstone in July 2007 for a suitable period before giving in, signing a contract and allowing us to all go racing as usual.
There are a number of reasons why that might not be what happens. Gillett might sort out his financing. Bernie might even now bail him out somehow. On the other side of the fence, the prize for Silverstone is a very big one and it might be much keener to sign on the dotted line than its recent megaphone diplomacy suggests. The membership-based BRDC can be a very unwieldy beast indeed sometimes, despite the best intentions of those that head it. And the circuit will likely be stuck with a loss-making event in 2010 and its managers might not be all that keen to take it on without some kind of sweetener.
Whatever happens, you’ll read it here first. Well, OK, maybe not first. But certainly very early on. So stick with us on crunch day for the British Grand Prix.
Here are links to some of this morning’s coverage:
- The Times: Damon Hill drivers a hard bargain for Silverstone
- Daily Mail opinion piece: Bernie Ecclestone must take the blame for our British Grand Prix fiasco
- Daily Mail: Silverstone can save the British Grand Prix, says former world champion Damon Hill
- Northampton Chronicle: Circuit back in F1 pole position
- Nottingham Evening Post: Crunch day for Donington Park
- Joe Saward: Reset your watches
- London Evening Standard: D-Day for Donington as F1 ambitions continue to stall
- Leicester Mercury: Donington Park boss in crunch British Grand Prix meeting (In which a local councillor demonstrates the conviction that the circuit is looking at a positive one-year hiatus rather than a permanent pulling of the plug.)