The British Racing Drivers' Club (BRDC) has sent the following letter to its members, explaining its proposals for the redevelopment and running of Silverstone.

"Following our letter of 26 January 2006, we are writing as promised to give notice of an Extraordinary General Meeting of the BRDC to be held on Wednesday 22 February 2006 at the Jimmy Brown Centre at Silverstone at 1.30pm.

Background

As you know, since the departure of the Interpublic Group from Silverstone in 2004, your Board has been assessing the most appropriate way to safeguard the future both of the Club, and of Silverstone as the home of British motorsport and the British Grand Prix.

Options for the Future

For some time, we have debated the options available to meet these objectives including:

Maintaining the status quo

Voluntarily relinquishing the British Grand Prix

Redeveloping the Circuit using existing resources

Developing a Master Plan in house with a view to engaging external developers to implement it

Engaging a commercial partner to develop and operate the Circuit

Together with our advisers, the Board undertook an analysis of these options. The options and our conclusions were shared with the Regional Co-ordinators in the Autumn. We undertook to the Co-ordinators to give Members more information and an opportunity for a full debate before finalising any transaction.

The Board's Conclusions

The Board and its advisers came to the view that given the BRDC's nature as a private members' club with finite resources, the best option for the Club was to seek a commercial partner. Furthermore, a co-ordinated approach to the operation and development of the Circuit is regarded as the key to unlocking the full value of the Silverstone estate.

The rationale for this conclusion was as follows. The Board shares the view held by many Members that hosting the British Grand Prix at Silverstone is a key part of the Club's activities, enhances the Club's standing and is a significant element of the value of Silverstone. Whilst the SCL team has taken tremendous strides in improving the financial viability of our commercial operations at the Circuit, the inescapable reality is that present day Circuit operations, heavily dependent as they are on one high profile event, involve substantial commercial risk and extensive continuing capital expenditure (in the period from 1988 to 2000, the Club spent approximately £30 million on capital projects and the Interpublic Group spent around a further £25 million in four years). The Board's view is that maintaining the status quo is therefore not realistic in the longer term.

We are not a property development company and are not equipped with the financial and other resources to undertake a development of the size and complexity required.

Project Hill

As you know, late last year we appointed KPMG Corporate Finance to assist in identifying an appropriate partner or partners for the Club. With KPMG's assistance, we have undertaken a rigorous tender process. An information memorandum was sent to thirty interested parties and nine full written bids were received. Following extensive evaluation, including interviews of bidders, by Christmas 2005 we had identified a shortlist of three proposed development teams who most closely met our objectives. We are now delighted to tell you that following a period of negotiations we have reached agreement in principle with St Modwen Properties plc and Northern Racing plc, in which St Modwen has a substantial shareholding, as the preferred bidders to develop and operate the Estate.

The challenge faced by the Board and our advisers was to find a commercial partner with a proven track record of both large scale multi-use development and venue operation. The combination that St Modwen and Northern Racing offer closely matches our aspirations.

St Modwen is one of the UK's leading property companies and is a member of the FTSE 250. Its turnover for the six months to 31 May 2005 was £81 million. St Modwen's market capitalisation is approximately £558 million. St Modwen's stated strategy is to carry out town centre regeneration, partnering industry in restructuring, brownfield land renewal and heritage restoration. Its financial objective is to double the size of the company every five years. Recent major projects include Llanwern Steelworks and MG Rover's Longbridge site. Further information can be found on St Modwen's website at www.stmodwen.co.uk.