DECEMBER 22, 2001
Jaguar sponsor HSBC faces losses as Kirch confirms new problems
MORE bad news for F1 backers emerged today (22 December) with the news that Jaguar Racing's major sponsor HSBC faces potential $720 million losses as a result of the Argentina economy facing meltdown, on the same day as F1 commercial rights holder Leo Kirch admitted that its debts have risen to $2 billion after a four per cent fall in underlying profits.
HSBC, which has backed the British F1 team since its days as the Stewart-Ford squad, has 225 bank branches in Argentina and employs up to 6000 staff. London business analysts have estimated the bank's total exposure in the country - including assets and credit lines - could be as high as $5 billion.
However, although these analysts believe that HSBC could be facing its biggest international write-down since the Asian crisis of 1998, even though a spokesman for the bank said that its exposure to Argentina is less than one per cent of its asset book.
Meanwhile Kirch managing director Dieter Hahn confirmed that Kirch's total debt was between $5.1-5.6 billion, although he denied that this meant that the group - privately owned by 75 per cent Leo Kirch - was under pressure to conclude a quick sale of its stake in the Spanish television company Telecinco.
Kirch admitted that it was looking for alternative partners for its pay TV business in case BSyB withdraws and exercises its option to sell its 22 per cent stake back to the group next October, a possibility which cost Kirch another $1.5 billion which, predict the analysts, would force it to sell off some of its assets.
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