APRIL 9, 2002

Will Kirch's insolvency lead to a manufacturer deal?

THE collapse of Kirch could open the way for a settlement between the car manufacturers and the Formula 1 group of companies. There is speculation that Kirch's insolvency could lead to a deal in which the car manufacturers take over Kirch's 58% of SLEC. This is only worthwhile if the money involved is less than the cost of setting up a completely new championship but it would offer a number of advantages in terms of the practicalities involved.

Kirch paid about $2bn for the F1 rights but they are worth only a fraction of that unless the car manufacturers are involved. The car makers have said that they are not interested in buying the company but may do so if the deal makes sense. With an administrator running the business, the sale of the shares might be possible.

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