03/11/2004
NEWS STORY
It's believed that Red Bull is extremely close to concluding a deal to buy Jaguar Racing, however there are still a number of obstacles remaining before the deal can be concluded.
The deal has to be done by November 15, by which time teams intending to participate in the 2005 World Championship must have submitted their entry and entry fee. Although the FIA and commercial rights holder Bernie Ecclestone might allow a small amount of leeway, we are talking hours rather than days.
Because of the urgency of the deal, it's understood that there is a certain amount of brinkmanship going on, with potential buyers - including Red Bull - hoping to pull off a last-gasp deal.
Should the deal not be done in time, Ford, which is currently paying £1.1m ($2m) a week to keep Jaguar Racing going, would face 'closure costs' of up to £250m ($450m), with up to 300 employees finding themselves out of work. Furthermore, if the deal is not done by November 15, Jaguar Racing would lose its world championship entry and would thereby become worthless to potential purchasers, since any new owner would have to re-register, thereby relinquishing TV revenues for the first three years in addition to having to find the £48m deposit required by the FIA.
Ford isn't merely interested in the price paid up front, and has admitted that it is willing to listen to all offers. However, potential purchasers must be in a position to convince Ford, and the HSBC Bank which is conducting the sale, that is has the necessary funding and skills to take the team forward and guarantee the security of its employees and the company for three years, since if the team collapsed within that time - say as a result of asset stripping - Ford would be liable under US corporate legislation.
It's understood that there have been a number of 'tyre kickers', potential purchasers that expressed an interest but had no money, however every interested buyer is heavily vetted by the HSBC.
In addition to Red Bull, which has been attempting to purchase an F1 team for some time, there is said to be a Chinese consortium which is looking closely at the Milton Keynes outfit.
With the Grand Prix World Championship (GPWC) slowly taking shape, there is no doubt that Bernie Ecclestone would welcome a new 'independent' team such as Red Bull F1, all that remains is for the deal to be done.
Despite the lack of certainty over its future, it is 'business as usual' for Jaguar Racing, which will take part in all three end of season tests, with Christian Klien and Bjorn Wirdheim on duty.
This has been described to Pitpass as comparable to someone intending selling their house, in which case you would want to keep it in good repair for the benefit of impressing potential purchasers. Therefore, despite the clear lack of certainty, the Milton Keynes team continues with its plans for 2005, desperately keen that it will be there in Melbourne to realize them.