SEPTEMBER 13, 2002
Arrows future clouded as Toyota deal flops
The future of Arrows remains in limbo with the mysterious American backer seemingly no closer to a deal than was previously the case. There were stories earlier this week suggesting that a deal might be struck which would see Toyota buying the Arrows Concorde Agreement rights and benefits. There was some logic in this as Toyota is not eligible for any benefits from the Concorde Agreement until the 2005 season. By purchasing the Arrows rights for, let us say $20m, the team would be buying benefits worth an estimated $30m, thus making a profit of $10m on the deal. This would have allowed Arrows to pay off some of its creditors which would opened the way for the team to be closed down quietly.
But it seems that after Toyota investigated the deal it was concluded that there was no value in the deal because of potential challenges from other teams which would lose out.
Arrows is still looking for a solution to the problem and it is anticipated that the next winding up order, which will come at the end of September or earlier in October could result in the petitioner (on this occasion Heinz-Harald Frentzen) also being paid off just before the petition goes to court. Frentzen is owed $115,000. This would mean that the team would make it to the end of the year without being declared insolvent and as there are no more races would give it the chance to restructure during the winter.
The biggest problem for Arrows is that there is now no sign of where it would get an engine for next year and Cosworth Racing is on the verge of doing a deal with Minardi and has confirmed that there will not be a fourth supply available next year. Jaguar Racing will use the new Cosworth V10 with Jordan and Minardi using the current engines being used by Jaguar.
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