Donington Park has exactly 96 hours to save it’s British Grand Prix contract and avoid an expensive lawsuit from Bernie Ecclestone’s company, FOM.
Yesterday afternoon, news began to filter out that Citigroup, Donington’s advisers on the £135 million bond issue, had withdrawn the bond.
There was interest apparently, but not enough and the two week window for getting the bond away proved to be too short, especially with no pre-publicity.
It was a high risk investment, but according to sources in the City there were some investors willing to take the risk.
“Donington Ventures Leisure Limited can confirm that a bond for £135 million to cover the cost of the F1 redevelopment at Donington Park has been unsuccessful,” said the company in a statement.
“Despite higher than expected levels of interest and very positive early indications, the bond – which was launched with Citi Group last week – has failed to secure enough subscription ahead of today’s deadline.”
The ‘higher than expected levels of interest’ sounds strange given that the intention was to get £135 million. It doesn’t sound like they were all that confident going in.
To rescue the Grand Prix contract now, Donington needs an equity investor, someone willing to buy in as a shareholder. Simon Gillett’s partner, construction millionaire Paul White, has already invested heavily in this venture and may feel he has to increase his involvement to avoid not only the collapse of the deal but also the bill which is likely to follow the breach of the contract with Ecclestone.
The British GP at Donington is not dead in the water yet. The deadline is midday on Monday.