DECEMBER 9, 2004
BAR Holdings in administration
British American Racing Holdings Ltd, the holding company of the BAR-Honda F1 team is in administration following the failure of a legal challenge to stop the company clearing out minority partners in the business, prior to a restructuring of capital which will see Honda acquire 45% of the business. The move is legal under British law although in some other countries such activities are frowned upon. The court appointed administrator must accept the best deal for the creditors. The major creditor of BARH is British American Tobacco, which owns around 90% of the company. It wants to start a new company with Honda and so can bid as much as it likes for the assets of BARH because it is, in effect, paying itself. The assets of BARH include the BAR team and its various facilities.
Former shareholders Craig Pollock and Gerry Forsythe had tried to stop the administration and as a result of not agreeing a settlement with BAT, will end up getting nothing for their shares, unless they are also creditors of the team.
There may also be quite tax implications in the deal.
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