OCTOBER 18, 2004
Team Dubai F1 - where is the money coming from?
The planned Team Dubai F1 operation is to be funded with money from Dubai but what is probably going to happen is that the team will fund the set-up costs with a bond issue on the Dubai Financial Market. This was the plan when the Grand Prix Investments company was looking at buying Jordan Grand Prix and it seems likely to remain the same now that the team will be buying the old McLaren factory, establishing a technical centre in Dubai and paying out not only $45m to the FIA but also whatever the costs asked for by McLaren and Mercedes for engine supply and technical assistance. This is going to cost a great deal of money but HH Sheikh Ahmed Bin Saeed Al-Maktoum, he man behind the project, is not averse to raising money from bond issues, having done exactly that for the Emirates airline recently, issuing a bond to raise $200m. The Emirates Bond was the first such operation on the DFM, which began operating in March 2000, and helped to raise the profile of Dubai on the world's financial scene, another benefit from a similar operation with an F1 bond issue.
The concept of the F1 team is not hugely different to that of the Victory Team powerboat team which was set up about 15 years ago by the Al Maktoums. By the mid-1990s it had become very successful and since then the family began to diversify and use the Victory Team brand with boat-building and commercial maritime vessels, notably patrol boats. In addition the reputation for precision engineering was used to start up manufacturing operations for car companies. Although the Victory Team is seen as an Arab operation it is run by a former Lamborghini engineer called Gianfranco Venturelli and American powerboat designer Michael Peters."
It is worth noting that Team Dubai F1 is not officially linked to either the new Dubai Autodrome, which has been developed by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum now with the new A1 Grand Prix series which is the work of Sheikh Maktoum Hasher Maktoum Al Maktoum.
Dubai has long-established plans to turn itself into the Hong Kong of the Middle East, a centre of finance and trade, a major international airport and a holiday destination.
In recent years the Crown Prince Sheikh Maktoum Bin Rashid Al Maktoum has created Internet, media, knowledge and health "cities" which have helped to diversify the local economy and is paying particular attention to tourism.
It is expected that the offices of Team Dubai F1 will be at the Dubai Autodrome and Business Park where the plans include a business park offering purpose-built offices with workshops and showrooms for the motoring and motor sports industry and direct access to the track. The development will also have a trackside hotel and serviced apartments, a theme park, indoor and outdoor karting facilities and a combined motorcross/rallycross Park. It will have racing academies, driver-training schools and an FIA-approved medical centre.
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