APRIL 30, 2002
And with a flick of the wrist our hero escapes his predicament...
ARROWS GRAND PRIX INTERNATIONAL LTD., the Formula 1 racing team, apparently has a new owner. Formerly controlled by Arrows Autosport Ltd., the holding company of a complicated group of Arrows companies, the racing team has now come under the control of a new company called Motorsport Holdings Ltd., which was established only in May last year.
The change in ownership has come to light from documents filed at Companies House in London.
Motorsport Holdings Ltd. is controlled by a series of nominee companies which can be traced back to a British Virgin Island company called Pelican Associates Ltd.. There is no indication as to who owns this as the British Virgin Islands are famous for their lack of financial clarity.
What is clear is that Motorsport Holdings Limited now owns 88.9% of the equity of Arrows Grand Prix International Limited with Arrows Autosport Limited owning the remainder. One share belongs to Kate Beavan, a TWR lawyer.
Tom Walkinshaw says that he controls the voting rights of the team. It is not clear who owns the assets as these belonged to separate subsidiaries of Arrows Autosport Ltd..
This means that the huge debts which belonged to Arrows Autosport are apparently no longer connected with the Arrows F1 team and have been left behind in the old company. The new company apparently has no responsibility for these.
How this all works is a complete mystery but it seems that the previous owners of Arrows (effectively Deutsche Bank) were happy to off-load the business to new investors (whoever they may be) if only to be clear of future losses.
Walkinshaw says that Arrows is a little short of its budget this year but hopes that good performances will make up for it. The best way to judge whether or not the team is in good financial health is to see whether it is spending money. The team recently did its first tests of the year and in Spain scored its first World Championship point. The big question now is whether or not Arrows can retain the Orange backing it has enjoyed in recent years. Rumors suggest that this money will go to Renault Sport next year.
There is still a problem with Jos Verstappen, who was under contract to drive for the team in 2002. The problem for the Dutchman is that a great deal depends on which company his contract was with.
One might be tempted to say that Arrows has (again) risen from the ashes like a phoenix, but given Walkinshaw's involvement in a project of that name in recent months, the reference is probably best left unstated.
The news has to be good news for Formula 1 as what was thought to be the weakest team appears to be in less danger of folding up but that does not really explain why the team did not test for the first four months of the year nor why Walkinshaw allied himself to Eddie Jordan and Flavio Briatore in complaining last week about the escalating costs of F1.
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