APRIL 21, 2001
Broadband slump threatens F1 money supply
TOM WALKINSHAW has not been very lucky with his recent crop of sponsors for the Arrows team. With Orange and Eurobet both having had some disappointments in recent months. This has not affected their F1 sponsorships (at least for the moment) but now it seems that Chello is also not doing as well as had been hoped. The broadband company is owned by the Dutch-based United Pan-Europe Communications which in Friday suffered the indignity of having its debt rating downgraded by Moody's Investor Service.
"UPC has a tremendous amount of potential but a boatload of debt," said the influential credit rating agency. It pointed to problems in around two years when the company has to refinance its borrowings.
Shares in UPC dropped nearly 14% but later recovered slightly. UPC said it disagreed with Moody's assessment.
The entire broadband industry has suffered a loss of confidence in recent months which has resulted in cutting back of expansion plans. UPC's shares are worth than 10% what they were when the current sponsorship with Arrows was agreed at the start of 2000.
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