Oh no say it ain't so
07-18-2012, 04:06 PM
#1
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Oh no say it ain't so
CAR NEWS
Nürburgring forced into bankruptcy
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The track hosted the Formula One German Grand Prix last year. LAT PHOTOGRAPHIC
The famed Nürburgring circuit in Germany is being forced in to bankruptcy, throwing its future into question.
By: Associated Press,
with additional reporting by Ronan McGrath on 7/18/2012
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Germany's legendary Nürburgring racetrack and entertainment complex is effectively bankrupt.
The circuit—which hosted Formula One's German Grand Prix last year—is to launch insolvency proceedings amid fears that it could run out of cash while the European Commission considers planned government aid.
The state government in Rhineland-Palatinate, which owns the financially troubled Nuerburgring GmbH, decided on the move on Wednesday, the dapd news agency reported.
State governor Kurt Beck said the reason was that the European Union's executive commission wasn't expected to approve planned government aid of 13 million euros ($16 million) by the end of this month.
That would lead “with high probability to an insolvency at the end of the month because of a lack of liquidity,” Beck said in the state capital, Mainz. He said his government decided to pre-empt that by choosing to launch “orderly insolvency proceedings.”
The private company that operates events at the circuit, Nuerburgring Automotive GmbH, said that it wasn't affected directly by the insolvency of the owner and would continue its operations.
The company said in a statement that it agreed with F1 boss Bernie Ecclestone last week on “a concept with which Formula One next year would be feasible.” The company had asked the state government for its approval and hoped to be able to conclude a deal shortly. It gave no details. The German Grand Prix this year will be held as scheduled at the Hockenheimring and not the Nürburgring, as part of its alternating-years deal with Ecclestone.
A state subsidy had been in place since a disastrous development plan left the 'Ring organization saddled with more than 350 million euros in debt. While the Nordschleife—the circuit's famous “North Loop” which covers more than 13 miles—generates healthy operating profits, the income does not cover the interest payments on the enormous debt incurred when the state entered into the plan with two developers, Kai Richter and Jorg Lindner.
The developers built a huge complex as part of the 'Ring's modern Formula One track facility, incorporating a large mall, car showrooms, hotel developments and an amusement park. Wildly optimistic projections said the investment would yield a tourism boom, but that never occurred.
The 'Ring has operated with the state subsidy since 2011, while simultaneously increasing the prices it charges auto manufacturers for testing and fans for track days.
So far it appears that the venue will honor all of its 2012 contracts, but beyond that the picture is murky. Dale Lomas, who runs the 'Ring-centric Web site and blog bridgetogantry.com, said he believes the track is so important to the region that it will be sold and continue to operate.
Sabine Schmitz, the cult hero and local race-car driver famed for giving tourists thrill rides in the 'Ring Taxi, on Wednesday told Autoweek that she believes it is too early to tell what will happen.
“At the moment nobody knows exactly what's going on . . . [The Allgemeiner Deutscher Automobil-Club] might be saving the 'Ring. We need to wait a few days to get better informations.”
The 'Ring is the local community's lifeblood and has operated continuously since 1927 except for during World War II.
Read more: http://www.autoweek.com/article/2012...#ixzz210DIEXA5
07-18-2012, 05:49 PM
#2
Everything I've heard about it is that the two actual tracks there will be untouched and will continue to operate (both generate very healthy profit margins and it would be silly to impact that), but that many of the other money-sucking projects there (the amusement park, the mall, etc.) are likely to all be sold to try and recover debts as best they can.
07-18-2012, 08:25 PM
#3
+1 to what was said above, which will be no loss to anyone. When I went to the Ring Werk it was a ghost town.
07-19-2012, 09:23 AM
#4
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