AUGUST 29, 2007

Intrigues at Spyker

These are interesting times at Spyker with financial troubles, battles among the Dutch shareholders, possible new investors falling over one another to get involved, and now trouble in the technical departments as well with the team's chief designer John McQuilliam - who has been with the team since 1991 - being suspended.

The F1 team is not saying why this has happened but there has been speculation that this is related to the recent crash-test failure which meant that the team team could not run its B-spec car in Turkey, as had been planned. It may also be related to rumours that Mark Smith may be returning to the team where he first made his name. In recent times Smith has been technical director at Red Bull Racing but was nudged out of that role by the arrival of Geoff Willis.

Yesterday there was a flurry of activity in Holland, following reports in the Algemeen Dagblad (AD) newspaper that a bankruptcy process has been instigated against Spyker Cars NV in Maastricht. The company issued a press statement denying this and saying that the company will be taking legal action against AD as a result. Spyker's shares dropped 12% in the day but the Dutch market regulator AFM decided to roll back trading after it decided that the reports had been "false and/or misleading".

Be that as it may, the reality is that Spyker Cars NV owes money and is struggling with its cash-flow. The F1 team says that its coffers have been tapped on several occasions by the car company, although oddly there is no mention of this in the company's quarterly returns. This means that either the F1 folk are not telling the truth (and there is no obvious reason for them to lie about such things) or that the financial statements are incorrect, which has all manner of possible implications.

Whatever the case, this is dangerous territory for any F1 team to be in because if the parent company runs into financial trouble it could easily impact on the subsidiaries, although in this case, it seems that the subsidiaries have been keeping the parent afloat. The key point from the F1 perspective is that the company that is signatory to the Concorde Agreement remains solvent. The important company, therefore, is Spyker F1 Team Ltd (UK company number 02417588) which was previously named Midland F1 Ltd and prior to that Jordan Grand Prix Ltd. If this becomes legally insolvent, all the team's rights under the Concorde Agreement are automatically forfeited, which means that the team is then worth nothing beyond the value of its physical assets.