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Donington had interest in bond deal, but not enough
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Donington had interest in bond deal, but not enough
Posted By: James Allen  |  23 Oct 2009   |  11:57 am GMT  |  26 comments

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Yesterday afternoon, news began to filter out that Citigroup, Donington’s advisers on the £135 million bond issue, had withdrawn the bond.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.

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26 Comments
  1. Michael C says:

    As you say ‘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.’

    Either the press release was completely wrongly worded or they were wasting a lot of money in trying to issue these bonds in the first place.

    Am I wrong James or has it been mooted before that Mr Ecclestone would like to get his hands on the circuit (perhaps as a lasting monument to him) and surely this gives him a golden opportunity to do so

    1. James Allen says:

      I’m not sure he sees it that way. Time will tell. In the meantime, if they do get sued, the place is hardly in a fit state to operate as a race venue for all the other important UK series it hosts. Not sure what will happen there.

      1. Stevie P says:

        “…hardly in a fit state to operate as a race venue for all the other important UK series it hosts.”

        And this is my biggest concern… they’ve ripped the joint apart with no concern about anything other than getting the F1 gig.

        Ok, so the agreement to move the Brit GP to Donny came before the credit crunch etc kicked off… but surely a risk assesment was performed, which would cover most (if not all) scenarios.

      2. DAN says:

        Now that Donington is a mess I suggest the following. In order for F1 to be Carbon Neutral the FIA should buy the place and replace the track by a Formula One garden. All the past or present F1 Engineers (or other top people) who are or were once on so called gardening leaves would contribute to its design using the best and greenest technology. I am sure they would come up with an amazing design of which the Sport could be proud of.

        I started writing this as a joke but more I think about it and more I think it would be a great idea actually!!!

        James as a winter day topic for the blog could you ask the like of Adrian Newey, Mike Gascoyne, Geoff Willis, Ross Brawn, etc… who all spent some time on Gardening leaves at some point in their career, to draw a quick sketch of their ideal Garden?

        As these guys have seriously good brains I guess they would come up with very interesting designs for a garden and might even enjoy the challenge! Here is one challenge where they could express themselves with no limitation (unlike modern F1).

  2. Érico says:

    I strongly doubt it’ll happen.
    In the end, Bernie will get his wish, open a slot in the calendar for the next insignificant, sanitized and bland venue filled with petro-dollars or whatever.

  3. Rob says:

    I wonder how the Wheatcrofts feel? They wont be getting any more rent unless someone can make it fit to race on again…

    They seem to be the big losers – Donington Ventures Leisure Limited has wrecked the track and made the venue virtually unsaleable (or un-rentable if that is a word). If DVLL goes bust then no-one gets any money.

  4. Mon Pen says:

    This is hardly surprising. Countless F1 internet forums said from day 1 (for example Talksportforum July 4 2008, to be precise) that Donington was hopelessly inadequate, for all manner of reasons – from layout to facilities to accessability to cost to technical issues over te proximity of the airport. Let’s face it nobody really thought this was ever going to happen.

    I’m sure that Bernie – sorry, Slavica’s offshore trust – will in the meantime squeeze a few more squillion out of the BRDC to make Silverstone happen next year.

  5. Steven says:

    Bernie and Damon Hill need to come to an agreement ASAP to save the British GP.
    What of Donington? I hope Tom Wheatroft will do something to restore this historic track to glory days of erm, 2008! Simon Gillet’s legacy could end up one of a building site.
    Donington need to work mainly on restoring the infield, filling in the holes made and re-erecting the Dunlop bridge.
    James, is the Silverstone track extension for the Moto-GP a Tilke creation?

  6. Neil says:

    There are only two groups of people responsible for this.

    The media, and the representatives of the BRDC who have been pouring poison into the ears of journalists since day one.

    I would gladly see the British Grand Prix dropped from the calendar completely. Brundle, Hill et-al need to be taught a lesson.

    1. Race1 says:

      I tend to agree. Whilst I would like to see the Brit GP continue somewhere. THE BRDC have played a massive hand in making the situation what it is!

      The stock response from various former drivers seems to be “Well it’s not as bad as Interlagos, as if that’s as high as we set our standards nowadays! And they could easily find the millions to build a new BDRC clubhouse a few years back and also set work for the circuit alterations for the MotoGP. But couldn’t, for whatever reason, find the inclination to give the place a lick of paint and rebuild the pit complex. Also didn’t stop them from rolling out an “artists impression” every 6 months or so as to what the new complex will look like…

    2. Neil says:

      The trouble is, you can’t just blame the BRDC as a single entity.

      There seem to be some old-school, “my-god-your-blazer-is-squffy”, types that can’t see the reality of 2009 finances. And then there are some people with (IMO) a better grasp of reality. Unfortunatly the argument between these factions gets in the way of sorting out a GP.

      See the housing-land sale debarcle as an example.

      Personally, I think Hill really wants Silverstone and the BRDC to survive and prosper in the 21st century, but he is seems to have one hand tied behind his back.

      Neil.

  7. F1 Kitteh says:

    Happy to hear that no investors got hosed. I think they put that ‘higher than expected levels of interest’ line in to save some face without considering how it would be interpreted !

  8. graham says:

    Simon Gillet for PM! He can’t f&@* it up any more than Brown.

  9. Dave Smith says:

    Just a silly question but if Bernie is not keen on Silverstone and Donington cant find the money. What is wrong with Rockingham becoming an F1 circuit? Any pointers on this as surely it cant be far off F1 standards.

    1. Rudy Pyatt says:

      Because it’s a roval. F1 (Bernie) is allergic to that, or we would still see Indy on the calendar. And it’$ not built and paid for by the government. Bernie’$ tithe, er tribute, er ransom would overwhelm Rockingham.

      Then again: Why not put at least ONE full-on oval race on the F1 calendar? The “but that isn’t F1″ answer? Well, a lot of things are going on that aren’t F1 — night races for one, something that’s long been done on ovals. I wonder if Jean Todt has any thoughts on trying this.

      James, do you know if anyone has seriously expressed interest in trying an F1 car on an oval? I know Patrick Head referred to a USAC race he attended in Indianapolis some years back as “proper motor racing,” so I guess he’s toyed with the idea.

      (Then again again, I also recall Jacques Villeneuave saying that you couldn’t race an F1 car on an oval because it would explode…)

    2. Rob says:

      Rockingham F### me,thats even more of a joke than Donington.Like it or not the only circuit in the UK that is capable of staging an F1 race,without tens of millions of £`s of investment and restructuring is Silverstone.

  10. Werewolf says:

    Another classic example of what happens when politics interfere with reality. Ecclestone tried to up the pressure on Silverstone by offering the star role to a bit part player who cannot even get to the theatre. All Silverstone had to do was wait for the inevitable.

    When egos collide, somebody else normally gets hurt and this time it’s British motorsport, which risks losing its GP and a historic venue. This nonsense should have been stopped months ago.

    Mosley has thankfully gone, it is time for Ecclestone to follow. Both men achieved much but both outstayed their welcome, becoming more extreme and less in touch with reality.

    Will Ecclestone be remembered as the hero that made F1 an international phenomenon or the greedy villain that destroyed his own country’s grand prix?

    1. Rudy Pyatt says:

      Well said sir, as usual!

    2. DAN says:

      Maybe the only positive aspect of Bernie making a deal with Donington was that it gave time to Silverstone to put its house in order and refine its own plan for the future? If Bernie gets some money from Simon Gillet as a result of the breach of contract with Donington he would be well inspired to use it to help Silverstone fund improvement to its facilities. Between the money Silverstone could gather on its own and the one Bernie
      is likely to bag they would have enough to do a good job.

  11. Dave Smith says:

    But with regards to Rockingham surely they could do what they did with the brickyard and build an infield although looking at the circuit layouts at Rockingham – they already have one. I disagree that Donongton is better. I have been to Silverstone over the years and they don’t seem to update the facilites for the fans only the VIP’s. In my opinion they dont deserve to have the race back!! What ever happened to the London GP?

  12. GP says:

    What I find strange about the whole Donnington saga is that right from the start most people said it would be a complete failure, yet Bernie went ahead and made the deal.

    Bernie didn’t get where he is today by making such bad decisions. I have to wonder if there weren’t some kind of hidden deal that made him ignore all the negative calls…

    1. Rich C says:

      I seriously doubt that Bernie got to be a zillionaire by listening to what “most people” say.

  13. Exchange and Mart says:

    I was personally never in favour of the move to Donington.. I have had a slight chuckle since all this has surfaced. How embarassing for Gillet. Bernie is a businessman first and foremost but he really needs to understand that Silverstone is the face of british motor racing. They need to come to a deal asap. Now i know that Bernie is never going to give Damon and Silverstone the 17 year deal that was offered to Donington but if a 5 year deal was put on the table then silverstone should not waste any time. http://bit.ly/2jAC3Z

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