Donington Park’s hopes of hosting the British Grand Prix from 2010 rest now upon the success of a bond scheme, announced today by Donington Ventures Leisure Limited.
Following the company’s failure to assure Bernie Ecclestone of its ability to host the event by the October 3rd deadline laid down by the F1 supremo, Donington and DVLL boss Simon Gillett are now in breach of contract and have just 14 days to pull themselves out of the mud and back into favour.
Their announcement today of the launch of a bond scheme to raise the outstanding £135 million of the £145 million they need to complete track redevelopment is thus the last throw of the dice in a game of chance that the circuit now appears to have little chance of winning.
“Donington Holdings Plc, the parent company of Donington Ventures Leisure Limited that operates the Donington Park motor racing circuit, has launched an offering of £135,000,000 aggregate principal amount of first priority senior secured notes due 2016,” said a statement from the circuit.
“The Notes are expected to be issued at a discount to the principal amount thereof. Purchasers of Notes will also be able to subscribe for warrants for no additional consideration.
“The offering of the Notes and the Warrants is being made solely by means of a confidential offering memorandum.
“The net proceeds of the offering of Notes, together with a concurrent offering of preference shares, will be used in large part to fund the redevelopment of Donington Park in preparation for the hosting of the Formula One British Grand Prix in 2010.”
But here’s the question. If Donington has thus far managed to only raise £10 million, and has missed deadline after deadline to the point which Bernie has told them they are in breach of contract, who in their right minds would take on the risk of shelling out such a huge sum, without any guarantee that the British Grand Prix will even now be hosted at Donington? Just as the BMW Sauber team lost its residual value by not signing up to the Concorde Agreement, so Donington’s failure to assure Bernie that it will be ready in time would appear to have lost the circuit any guarantees it could give to potential investors over the security of their investment.
Bernie has now gone on the record to say that the 17-year deal to host the British GP could now, and in all likelihood has already been, offered to Silverstone. The BRDC is likely to want to play hardball over cost, but at the end of the day has at least put in place a plan for the future which appears both affordable and achievable in the timeframe.
With less than two weeks to find their £135 million, Donington’s days as host of the British GP appear to be numbered, for even if the money can be found, the chances of track alterations being made in time for 2010 look bleak.
What a bloody mess.