Posts Tagged ‘Donington’

It has been a see-saw saga and it’s not over yet, but the chances of Donington hosting the British Grand Prix Prix next year received a positive boost today when it was announced that the legal dispute between the promoter, Simon Gillett and the landowners, Wheatcroft and Son, was resolved. This dispute threatened to wreck the planning application without which the event would be a non-starter.

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A statement posted on Donington’s website reads as follows:

“Wheatcroft and Son Limited, and circuit leaseholder, Donington Ventures Leisure Limited (DVLL), confirmed that they have reached an agreement which they hope will move a step closer to securing the future of East Midlands’ parkland circuit Donington Park.

“The settlement was reached after court proceedings were issued by Browne Jacobson LLP, acting on behalf of Wheatcroft & Son Limited, seeking £2.47m in rent arrears and forfeiture of the circuit lease.

“The parties have also reached agreement on the terms of the planning agreement required for planning permission to be issued and are finalising arrangements with the Council.

“These positive developments, combined with the ongoing encouragement from Formula One rights holder Bernie Ecclestone, demonstrates that DVLL is committed to pushing forward with its 2009 racing plans and 2010 Formula One preparations.

“Kevin Wheatcroft of Wheatcroft & Son Limited said: “We are pleased that significant progress has been made in recent weeks and I am delighted that we have now reached an amicable agreement. We have always shared and supported the vision of ensuring that Formula One returns to Donington Park and are hopeful that, with the settlement achieved, that vision will be turned into reality.”

“DVLL Chief Executive Simon Gillett added: “This is another positive boost for Donington Park. We were always aware that saving the future of the British Grand Prix was an enormous task, but it is one that we are fully committed to and will make happen. So far, all of our efforts have been achieved in the face of adversity and it’s reassuring to know that the Wheatcroft family shares our vision and passion for British motorsport.”

Now Gillett can focus all his attention on raising the funding for the construction of the circuit. You have to admire his determination, but there are still a lot of people closely connected to the business who doubt the viability of this venture.

The original funding plan was based on a debenture scheme, but that appears to have suffered a major blow when the bank involved pulled out. I don’t know if Gillett is still trying to do a debenture scheme, but the problem with debentures for Formula 1 tracks is the value they represent.

Why would you pay a big premium to have your own box for a Grand Prix, when you can get yourself and your guests looked after like a king in the Paddock Club for £1500 or so a head, with a pit garage tour thrown in?

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I’ve just received the item below in my inbox. It relates to a law suit which veteran Donington circuit owner Tom Wheatcroft has filed against the Donington Ventures company of Simon Gillett, who has a contract to stage the British Grand Prix from 2010 onwards.

“Wheatcroft & Son Limited, the owners of Donington Park motor racing circuit, have issued legal proceedings against Donington Ventures Leisure Ltd, the operators of the circuit, seeking £2.47m in rent arrears and forfeiture of the circuit lease.

Lawyers at Browne Jacobson LLP, acting on behalf of their client Wheatcroft & Son Limited, issued the proceedings at Derby County Court earlier today (23rd April).

Wheatcroft & Son Limited awarded Donington Ventures Leisure Ltd a 150-year lease back in January 2007. Donington Park, has since been awarded a ten-year contract to host the British Grand Prix from 2010.

Kevin Wheatcroft of Wheatcroft & Son Limited said :
“It is with great reluctance that we have taken this decision. Donington Ventures Leisure Ltd owe us nearly £2.5m in rent dating back to September 2008. Despite receiving numerous reassurances over a number of months they have consistently failed to meet their financial obligations under the terms of the lease. We have held off taking legal action for as long as possible but have been left with no choice but to commence proceedings to recover the outstanding rent and forfeit the lease.”

I posted on the accounts of Donington Ventures earlier in the year. There have also been some problems with circuit licences.

Gillett was due to announce details of a debenture scheme for funding the works to bring the track up to F1 standard. This will add fresh material for the sceptics.

The timing of the issue of the press release was interesting as Donington Management and Lord Astor were begging for government support for the Grand Prix in the Houses of Parliament this afternoon..

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Donington CEO Simon Gillett went on a charm offensive today, responding to what he sees as a barrage of negativity about Donington’s claims to host the GP in 2010. It’s been quite an emotional day, what with Grandprix.com’s Joe Saward making a passionate defence of the project this morning.

Gillett had been well coached in what line to take today. He went for the ‘I’m just an honest guy trying to make a buck’ approach, and reminded everyone that so far, everything he said he would do he has done. The problem for him is that from relative obscurity he has done those things, but now he’s in the spotlight, everyone’s watching and he’s climbing up onto the tightrope. He’s into the really expensive phase of the project and no-one can see where the money is coming from. So he’s run into some negativity. Making an oblique reference to Damon Hill president of the BRDC which owns Silverstone, he said,

“I guess it would help if I was born into a racing family or I was an ex-driver – but I’m not. If you cut me open I don’t ooze petrol. Instead, I ooze business – and I think that’s frowned upon a little. I’m not one of the old guard, so people ask why I’ve got one of the crown jewels when they don’t think I’ve the right to have it.

“Remember, we didn’t steal the grand prix from Silverstone – it was dead. They refused to pick up the contract on the table, and there was no future for grand prix racing in Britain,” he added. “So we picked up the contract; we took the risk, are doing all the work – yet we’re still seen as the perceived threat to the British grand prix. Realistically, we’re the only lifeboat it has got.”

The reference to ‘picking up the contract’ is just that. There were contracts on a table in Bernie’s motorhome during the Grand Prix weekend last year and he did litterally pick it up.

There are plenty of people around the sport who like to play politics and the British Grand Prix is one of the favourite games, as Gillett is now finding. There’s no doubt that there is an element who are exactly as Gillett sees it, just out to get the knife in. But equally there are a lot of neutrals who don’t mind too much if it’s Silverstone or Donington as long as it happens and is a credit to the UK. I fall into that camp and so do many of the professionals in F1.

I posted a relatively positive piece earlier this year, when Gillett explained the debenture scheme to me, I was rather less positive once I’d seen the 2007 accounts. Now I’m waiting to hear exactly how he’s going to fund it and how much of the debenture scheme is already in the bag.

I was at Donington in 1993, working in the pit lane for ESPN TV of America and it is one of my most special racing memories; Prost pitting seven times for tyres, Rubens almost getting a podium before running out of fuel and Senna’s utterly majestic drive in the McLaren and a fascinating interview with him afterwards.

A Donington GP would be great. It has the history from pre-war days and a good brand to build on. But despite today’s pr offensive, the question remains, will it happen?

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I posted last month on Donington, which is due to host the British Grand Prix in July 2010, seventeen months from now. I gave details of a conversation I’d had with Simon Gillett at the Motorsport Business Forum in December. But now some worrying noises are coming out on this story, regarding the circuit’s financial position

The story has run this week in the Mail, the Express and the Telegraph. It refers to the accounts for the year 2007, which were filed at Companies House on 21st January this year, three weeks ago.

They refer to the eye-catching figures of £67 million of debt and losses of £12.7 million. I’ve seen the accounts and that’s definitely what they say, but it’s not clear what the debt is made up of, beyond a £16 million bank loan, £4m of which is guaranteed by Gillett’s partner Paul White. White owns a construction business in the Midlands.

The accounts are for year end 2007, so they cover the period at the peak of the business cycle and the assets are valued in there at £55 million. It does not say who valued them. Not much in the property world is worth the same today as it was in 2007. Interestingly, the accounts say that the group meets its day to day capital requirements through the bank loan and through support from White. White has indicated that he is willing to go on supporting it, but the auditor notes that he is under no obligation to continue to fund it. There is no mention of Gillett guaranteeing any of the loan.

There are warning signs all over the accounts from the independent auditors, who say that they were ‘not able to obtain or review’ documents of financial forecasts or evidence that Donington has binding commitments with providers for the funds required.

This is interesting because Gillett told me last year that he had a deal with IMG and Goldman Sachs on a debenture scheme, which guaranteed him the money. He has said all along that he would reveal details of the debenture scheme at the end of March, so we’ll have to wait until then to get the full picture. Bernie Ecclestone has said that he wants to see that the thing is on track by September if the race is to go ahead.

The auditors add that the current downturn creates ‘uncertainty particularly over a) the level of demand of the group’s services and b) the availability of bank and other finance in the foreseeable future.’

Gillett told Ian Parkes of PA Sport this week that the whole thing is on track, despite the doubters. He denies that it has the debts being quoted and says that a computer model of the new track facilities will be launched very soon. He said that the 2008 accounts had not been filed yet, but the current stories relate to the most recent set of accounts, for 2007.

All very mysterious. One thing is clear though; Abu Dhabi this ain’t.

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Donington, Buemi and more

It’s been an interesting week for news, with the Buemi announcement, Donington getting its planning permission, FOTA making further cost savings and more on the Honda buyout. Here is my take on the week’s news digest.

Donington was granted planning permission to gear up for hosting the Grand Prix is 2010. This was the stage at which the Brands Hatch bid failed a few years back, so Simon Gillett and his team have done well to overcome that hurdle but many are still sceptical about the viability of this project. Ron Dennis voiced his concerns this week saying that the pound’s depreciation against the dollar will make the contract 25% more expensive for a start. He is also doubtful about the debenture scheme. I mentioned in an earlier blog that Gillet told me in December that the debenture funding was in place through Goldman Sachs and IMG.

Dennis’ voice is a significant one, but you also have to remember that he is a lifetime Guardian of Silverstone, along with Frank Williams, appointments the BRDC put in place a few years back to ensure that there would be protection against the track being sold in the future. So Ron does have a vested interest in this story.

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This is a big week for Donington and its bid to host the British Grand Prix from 2010 onwards.

On Thursday Simon Gillett and his team will learn whether the planning application they have submitted to develop the track has been approved by the local council. It was at the planning stage a few years back, if you recall, that the Brands Hatch bid to host the Grand Prix fell apart and they had to go, cap in hand, back to Silverstone.

Gillett is confident that the same fate will not befall him. He was at the F1 Business Forum in Monaco last month. He cut a slightly odd figure in those circles, very much a wheeler dealer Geezer, with square jaw and stubble, among the studious Continental marketeers in muted suits.

He’s had to weather a lot of scepticism and has not had much to say about the Donington project publicly because it is waiting for the planning decision. If and when that goes through, he will have a lot more to say. Many people are sceptical about Donington’s chances of being ready in time for a Grand Prix in Summer 2010, but I spoke to Gillett at length in Monaco and he said that everything is pointing in the right direction.

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