AUGUST 23, 1999
Discussions at Arrows
TOM WALKINSHAW and Prince Malik ado Ibrahim are currently negotiating over their shareholdings in the Arrows Formula 1 team - and all the indications are that Walkinshaw will soon buy the Nigerian out of the team. Prince Malik is rumored to have agreed to invest $18m when he bought into the team at the end of last year. This secured 25% of the shares for him but we understand that he was due to make a payment at the end of July and that this does not appear to have been made and the partners are now in a period of discussion which is expected to last for a maximum of six weeks. This is expected to result in Walkinshaw buying Malik's shareholding back from him, probably with some of the $20m which Walkinshaw raised last week by selling his Ixion Motor Group to the Sytner Group. This will give Walkinshaw a majority shareholding in the team once again although investment banking group Morgan Grenfell Private Equity Ltd., a subsidiary of Deutsche Bank, will retain at least 40% of the team. Walkinshaw and Morgan Grenfell intend to build up the company with the long-term aim of a flotation on the stock market.
As part of this plan Walkinshaw has recently landed a supply of Supertec V10 engines for 2000 and there is well-founded speculation that Tom has done a deal with Renault to run Nissan-badged V10 engines in 2001 and beyond. Walkinshaw is well-connected with Nissan and has just embarked on a major new project with Renault to build roadgoing versions of the Clio Renault Sport V6 24V at his AutoNova factory in Uddevalla, Sweden. The plant is currently building the Volvo C70 but that deal is not expected to be extended beyond the current contract as Volvo has been taken over by the Ford Motor Company. Last week Walkinshaw's links with Volvo faded further when the Swedes announced that the Walkinshaw-run British Touring Car Championship team - which won the title last year with Rickard Rydell - will not be continuing in 2000.
The Clio Renault Sport V6 24V was launched as a racing machine in October last year but in the last couple of weeks Renault has agreed to put the 150mph model into production. The Formula 1 engine deal is believed have been done on the back of that deal.
We hear that Walkinshaw is also negotiating with several big sponsors, although it now seems that Japan Tobacco will not be the team's big backer - at least not until the current contract with Benetton ends at the end of next year.
There are big changes going on at the moment at Arrows as Walkinshaw puts together a new team and we hear that the team's commercial chief Richard West has departed in recent days.
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