More on Arrows...

FURTHER investigations have revealed some more details of the takeover of Arrows Grand Prix International by a company called Motorsport Holdings. AGPI will not have been able to offload its existing debts with suppliers but as these are not public information it is impossible to know how large they are, except by using educated guesses based on figures from previous years.

For some reason the Arrows files at Companies House in London are not currently available to the public and one can only assume that access has been withdrawn to this because of some pending legal activity (which is usually why files are withdrawn from the public domain). It is known that Jos Verstappen's management is working on a settlement for its dispute with the team.

Paying the Ford engine bills is the biggest problem this year and, based on a rough calculation on what the deal is costing, that figure must be around $1.6m a month (perhaps a little less if more money was paid at the start of the deal - which is normal).

There is however some long term "debt" which the new company has to carry in the form of what are called "redeemable preference shares".

A redeemable preference share is a complicated financial instrument which, in effect, acts as a fixed-term security for a debt. At a set point these have to be converted into ordinary shares by the company paying them off. Until that happens they provide the holder with a small annual dividend. This type of shares are often used in management buyouts but are sometimes also used by banks to lend credibility to a struggle company.

Arrows has $35m of these which are still owned by Arrows Autosport Ltd. This is rather better than the situation was a year ago when the team's debts amounted to more than $75m. It seems therefore that around $40m has been written off by Morgan Grenfell.

In the last few weeks Walkinshaw has embarked on a major charm campaign to try to win over the F1 media and improve the way the team is being viewed. This is a sensible idea but when all is said and done, the future of the team is going to depend on the numbers adding up.

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