Nurbergring future in doubt

[Bob]

The future of motorcycle racing at the legendary Nurbergring is in doubt as the major shareholder revealed that it could enter administration.

Nürburgring GmbH owes around £235 million to their bankers, related to development work undertaken in 2009. An emergency loan application for £10 million to cover interest payments is expected to be turned down.

Kurt Beck, the state governor for the Rhineland-Palatinate Bank said there was a “high probability of insolvency (of the circuit) at the end of the month due to a lack of liquidity”. The original 13 mile Nordschleife circuit – still hugely popular with both car and motorcycle enthusiasts – does generate healthy profits. However this does not cover the interest payments on the overall debt.

The Nurburgring currently hosts rounds of the World Superbike and Formula One championship on the Grand Prix circuit.

[Ender EnZed]

The original 13 mile Nordschleife circuit – still hugely popular with both car and motorcycle enthusiasts – does generate healthy profits. However this does not cover the interest payments on the overall debt.

I don't get this. What's gone wrong here?

[SS90]

Just another example of a company (or country) borrowing money it knew it could not repay, unless the gamble pair off, in which the improvements the money was borrowed for managed to increase margins to the point that they where able to meet their interest payments, and later, principal as well.
When they where loaned this money, there was plenty to go around, now, it's a different story.

These guys ( the company, and the back), knew the risks, and took the gamble, ot didn't pay off.... Possibly they where even COUNTING on the whole thing defaulting, so that a consortium could take over.... Been known to happen in these games.......

[FJRider]

These guys ( the company, and the back), knew the risks, and took the gamble, ot didn't pay off.... Possibly they where even COUNTING on the whole thing defaulting, so that a consortium could take over.... Been known to happen in these games.......

Or declare Bankruptcy ... and pay-back at 2 cents in the (Euro) dollar.

[tigertim20]

Or declare Bankruptcy ... and pay-back at 2 cents in the (Euro) dollar.

maybe they should ask otago rugby how to fuck their own over in order to get their own way?

Meh, theyll find a way to keep it going at everyone elses cost no doubt

[mashman]

Can we import it?

I don't get this. What's gone wrong here?

It makes a profit and yet it can't service its debt?

[schrodingers cat]

Motor-racing (or rather money-racing) world wide is in a bit of a spot.
The money has tightened up all round and the willingness to throw public money at events on the dubious promise of riches falling from the sky is evaporating.
As usual it will be left to the little people to pick up the pieces

[onearmedbandit]

Apparently there's a little more to the story then seems.

http://blog.caranddriver.com/nurburg...-nordschleife/

Here is a snippet

The downfall began in 2004, when grandiose plans to build an entertainment park on the Nürburgring’s premises took shape. Viewed by purists as blasphemy, the plot was supported by Rhineland-Palatia’s Social Democrat government. Shady investors promised to pump funds into the project, but the money never came in. But so far, the state government has invested more than €500 million (more than $610 million) in the complex—a spending spree the European Union now wants to put to an end. Without the government subsidies, the Nürburgring can’t pay the hundreds of millions owed to the banks.

[Fast Eddie]

would be sad if you couldn't race/ride on it anymore..

but what are they going to do? when the money runs out are they going to tear the whole thing up? doubt it..

she'll be right..

everyone better get over there and tick off another item off the bucket list before its too late!

[SMOKEU]

I will be so pissed off if I don't get to ride that circuit one day.

[ducatilover]

Is that near the Nurburgring?

[Bob]

Can we import it?



It makes a profit and yet it can't service its debt?

You have to differentiate between the traditional road circuit and the race track (where F1 is held). The latter is the debt-ridden element - caused in no small part by the evil that is Ecclestone. The profit generated by the old road circuit is not enough to service the interest payments of the road circuit.

And of course, if the road circuit goes under, Ecclestone just moves on to the next circuit desperate to get F1 there... no matter how much it drives them into debt.

Same thing happened to Donington. Same thing will happen to others.

[p.dath]

I would be surprised if the track closed down. Sure the current owners might go bankrupt, but the liquidator will look to sell it to recover funds.

And if it is operating at a profit, before the interest payments, then there is sure to be a new owner interested in buying it. Basically they would get the new improvements at a hugely discounted price, and have a profitable business as well.

Who will loose? The banks that made the loans, and anyone entity guaranteeing those loans.