McLaren in legal battle over refinancing
McLaren has successfully applied for fast-tracked legal action in the UK courts in a battle for urgent refinancing in needs to prevent a cash shortfall.
The action concerns existing security held over the Woking facilities and the collection of heritage McLaren racing cars in a previously issued bond. This means basically the McLaren Group wants to raise £280m to secure its future.
McLaren’s arguments in favour of a speedy resolution indicate just how urgent the need is for new financing.
In court documents, it states: “Whilst the Group has sufficient liquidity to meet its obligations as and when they fall due in the very short term, further liquidity is required to be made available by no later than 17 July 2020,” and that “additional liquidity of approximately £280 million would be sufficient for the Group to be able to support its operations into 2021.”
It adds: “This state of affairs is not the fault of the Group. Rather, it has been caused by the COVID-19 pandemic – which has wreaked havoc on the UK economy and threatened the livelihoods of millions of people and the viability of many businesses.”
The documents say that the proposed transaction will mean that they can access additional liquidity so it can keep going into next year. McLaren had proposed the transactions to prevent cash flow problems include McLaren selling its properties and leasing them back from the new owners, and selling “certain of” its heritage cars to an outsider.
This could have been the alternative to selling them to a newly created subsidiary within the McLaren Group, which would then be able to obtain an asset-backed loan from a third party. McLaren claims that they had no option but to accept the alternative financing proposal (on terms dictated by them).
McLaren wants to avoid a long and drawn-out trial which would take a significant amount of time to resolve. In a remote hearing held last Friday, Judge Anthony Mann noted that the timing was “ambitious” but agreed that a speedy resolution was essential, with a trial starting on July 2.
McLaren agrees loan with National Bank of Bahrain
McLaren is looking like they will agree to a loan with the National Bank of Bahrain as it seeks the finances with which to address an urgent cash shortfall.
The loan allows the team to secure the first stage of the required refinancing from a ‘friendly’ organisation that shares a significant part of its ownership with McLaren itself. The bank is forty-four per cent owned by Mumtalakat, Bahrain’s sovereign wealth fund, which also owns 56% of McLaren.
A loan between the two parties would be on more favourable terms than those available on the financial markets.
Documents have indicated that McLaren is seeking £280m and that new funding is required by mid-July as the impact of the COVID-19 crisis hits the company hard. It has also begun legal action to free its Woking properties and collection of historic cars to help raise cash via mortgages, or a sale.
The case will begin on the eve of the 2020 season, next Thursday. Sky Sports has reported that could potentially happen in the short term, and without that legal action first proving successful.
A McLaren spokesperson declined to comment on the latest developments.
Zanardi to remain in a coma for at least a week
Doctors treating former F1 driver and Paralympic champion Alex Zanardi say that he will remain in an induced coma after suffering a severe head injury in a handbike crash on Friday.
Speaking to Sky Sports Italy, professor Giuseppe Oliveri, said, “This is what we can expect at best at the moment. It will take a long time. He will remain sedated for another 10-15 days. At present, his response is good.”
Adding, “We do not know to which extent his coma is due to medications and to his medical conditions.”
Zanardi is an inspirational figure in the worlds of motorsport and Paralympic endeavour, a hugely popular and positive competitor who returned from life-changing injuries with a smile. Following his accident in 2001, he had both legs amputated above the knee.
During his recovery, Zanardi designed his own prosthetics and learned to walk again.
He then turned his attention to hand cycling and developed into one of the most accomplished athletes in the world. He won four gold medals and two silvers at the 2012 and 2016 Paralympics, competed in the New York City Marathon and set an Ironman record in his class.
Today the hospital said there will be no further updates unless his condition significantly changes.
Vettel begins his testing ahead of Austria
Sebastian Vettel has begun his preparations ahead of the season opener in Austria, the test at Mugello marks the German’s first outing from Ferrari since it was announced he would leave the team at the end of 2020.
Ten days ahead of the first weekend of the season, the four-times champion was testing the 2018 car, the SF71-H, in the morning with Ferrari, following Mercedes and Renault’s lead by running their two-year-old challenger before the delayed campaign gets underway.
Vettel will be replaced by Carlos Sainz next year. He managed to cover the equivalent of a Grand Prix distance during his stint before handing over to team-mate Charles Leclerc in the afternoon.
Ferrari says the test was ‘deliberately run in the same working conditions the teams will experience in Austria’, with mechanics and engineers working in masks and respecting social distancing in a modified garage layout.
A statement said, “Sebastian and Charles also did the same when they changed over seats in the SF71-H at the lunch break.”
The outing at Mugello has been intriguing as it has been suggested as a strong contender to replace one of the cancelled races. The Tuscany circuit is owned by Ferrari and may host a second Italian round.
Vettel added, “I was glad to get back in the cockpit after a break that was even longer than the usual winter one. I was also very pleased to see all the guys from the team at last.”
“It was great to once again get those feelings from a car and to do so at such a spectacular track. I really think Mugello deserves to host a Formula 1 Grand Prix.”
Mugello should have Grand Prix – Vettel
Sebastian Vettel believes following that test that Mugello deserves to have its own Grand Prix. The circuit is being considered as a backup, if Liberty is unable to secure fifteen races, at venues with existing contracts this year.
The coronavirus pandemic has resulted in a rescheduled 2020 calendar, with the first eight races confirmed and due to get underway in Austria next week.
Seven to ten races are still waiting for confirmation, but it’s looking certain that the European season will be extended until the end of September. Mugello, Imola, Hockenheim and Portimao, Mugello is being considered as a potential back-up venue to bulk out the second half of the season.
Mugello, which is located in the Tuscan countryside, has never held an F1 Grand Prix but is the home of the Moto GP Italian Grand Prix. The circuit is owned by Ferrari and meets the FIA’s safety standards to host a Formula One race.
ROKiT about to sign Mercedes sponsorship deal
Motorsport.com, says it has learnt that Mercedes could be about to sign a new sponsorship with ROKiT group ahead of next weekends season opener in Austria.
ROKiT was previously the title Sponsor of Williams, of the 2019 Formula 1 season, only for the deal to be terminated by the team at the end of May. But ROKiT is now on course to become a sponsor of the Mercedes F1 team ahead of the new season, with confirmation of the deal understood to be imminent.
A Mercedes spokesman said the team “can’t offer comment on any confidential commercial discussions, be they with ROKiT or any other brand”.
The ROKiT group covers a series of brands, including its own in-house phone company and the ABK brewery in Germany, the logos for both being carried on Williams’ car through the 2019 season and 2020 pre-season testing.
After the split with Williams, the phone manufacturer stressed it remained committed to motorsport. It also has involvement in Formula E as the title sponsor of Venturi, as well as sponsoring all of the W Series cars.
Mercedes are looking to make its F1 and motorsport division more profitable in the future ahead of the arrival of the $145 million cost cap in 2021.
Mercedes F1 boss Toto Wolff said in February that making the team profitable was “exactly what we have as our target”, aiming to make funding the operation a “no-brainer” for parent company Daimler.
F1 to sell squares on chequered flag
Formula One has announced it will sell off squares on the chequered flag at races through the 2020 season to raise funds for charity. This is part of its ‘We Race as One’ initiative announced earlier this week to tackle racism and inequality.
Fans will have a unique opportunity to purchase spots on the chequered flag shown at the end of each race. The plan is expected to raise £11,000 per race, with fifty-six of the eighty squares going up for sale. The remaining 24 squares will be made available to the race promoter to pass on to its fans and guests.
Each fan will have their name printed in the square they buy, although they are not able to choose which square their name is placed in. Following the race, the fans will receive their square framed and mounted, as well as a picture of the chequered flag and an authenticity hologram.
Fans can now buy squares on the flag for the season-opening Austrian Grand Prix on 5 July for £199.99.
The sport is also planning to make more squares available at subsequent races through the 2020 season, with squares going up for sale between two and three weeks before each Grand Prix.
All squares can be purchased via the F1 Authentic website.
On Monday, the sport announced the ‘We Race as one’ initiative was announced by F1 on Monday ahead of the delayed start to the 2020 season, recognising the Coronavirus pandemic, Black Life’s Matter and other social issues.
Teams right to help Pirelli by cutting downforce
Renault’s F1 managing director Cyril Abiteboul says it right that teams should agree to trim downforce so they can help Pirelli to ensure the 2019-spec tyres are able to be used until 2022.
Last year the teams rejected the 2020 tyres to stay with the current spec, this was before the pandemic. However, earlier this year as part of cost savings it was also agreed that next years regulation changes would be delayed by a year.
To make sure the tyres are able to cope with increased downforce, the teams have agreed to a slight change in the floor rules that will help the 2019 tyres cope for an extra year.
Racing Point’s technical director Andy Green believes the change means a “front to back” a reworking of the current aerodynamic package. Abiteboul says he has some sympathy for Pirelli, as the company always has to react to the direction taken by the teams and the FIA.
Speaking to Motorsport.com about being a supplier and the weight of expectation, Abiteboul said, “It’s a big ask, a lot of expectation. I think we need to do a slightly better job in giving sufficient notice and stability on our decisions so that Pirelli are given the opportunity to develop the right product for what we want to do.”
“If you take the example of this year, let’s not forget the circumstances. We were supposed to move to 18 inches next year, but we decided just when we were coming back from Australia to postpone the regulations by a year, and we always need to look at the consequences of our decisions.”
He says that it was right to ask the teams to adjust their cars to the tyres, but says that the 18-inch tyres need to deal with under the new technical regulations in 2022.
Real-time graphics to be rolled out
Formula One has unveiled new real-time graphics designed to give more information to fans which will be rolled out at next weekends Austrian Grand Prix.
In collaboration with Amazon Web Services, it has been revealed that F1 will roll out six new real-time graphics during the 2020 campaign. The first of these, which will be in place for the season-opening Austrian Grand Prix, will offer fans a ‘Car Performance Score’.
This will be based on statistics relating to the car’s strengths including power, grip, downforce and drag. There will be four core metrics on offer: Low-Speed Cornering, High-Speed Cornering, Straight Line and Car Handling.
From the second race at Silverstone in August, which is known as the 70th Anniversary Grand Prix, there will be an Ultimate Driver Speed Comparison to help compare current drivers from the past. The data runs back to 1983.
From the Belgian Grand Prix, a High-Speed/Low-Speed Corner Performance graphic will allow fans to see how well drivers tackle high-speed corners (that above 175kph/109mph), and slow speed (below 125mph/78 mph).
Later in the year, three new graphics will include, one for Driver Skills Rating, one for Car/Team Development and Overall Season Performance and a final one for Qualifying and Race Pace Prediction Graphic.
The Driver Skills Rating will aim to identify the best total driver by taking into account various performances, like qualifying, starts, race pace, tyre management and overtaking/defending styles.
Rob Smedley, F1’s chief engineer told Autosport, “The F1 Insights we’re delivering together are bringing fans closer to the track than ever before, and unlocking previously untold stories and insights from behind the pit wall.”
“We’re excited to be expanding this successful relationship to bring even more insights to life, allowing fans to go deeper into the many ways that drivers and racing teams work together to affect success.”