UK Circuit sell-off

[alfaman]

Hope this isn't a repeat of other threads but after a quick trawl on the internet during the night I saw that Octagon's sell off of its British circuits is underway.

Its Silverstone's lease sold to Bernie for £1 allegedly.

Oulton Park possibly being sold to a historic racing enthusiast in the north west.

Snetterton being sold to developers - not for racing purposes.

No news on Cadwell Park or Brands Hatch.....yet.

Is this all true or is it a case of chinese whispers stretching the truth to the boundaries of reality?

If all this is correct it would be a potential disaster for British motor racing.

I've already seen the 750 MC calling on enthusiasts in East Anglia to save Snetterton.

Just how bad could it be??

[ss_collins]

These rumours have been getting ever louder and more believable. Can someone tell us for sure. An interseting aside, a former military testing venue in surrey is being quietly touted around as becoming the new brooklands...

[Piglet]

Can you quote your sources alfaman? More than likely this is just the same rumours that have been circulating for the last few months.

[ss_collins]

Its reported in the independant today bye the bye

[vaughan jones]

A web site www.motorsnippets.com.has the info that alfa man put on the site, it is dated 6/02/03, does not seem to have been updated since then. ?????

[ss_collins]

well something afoot for the independant to cover it today, and I've not forgotten the insider information I got on contacts on the GP loop.

[DSM]

Why is it potential disaster? What single bit of good have Octagon done since moving into the UK's circuits? It could be one of the best things to happen.

[TimD]

Well, given the nature of some of the rumours, the potential disaster would be driving up the A11 in a few years' time, and encountering turnoffs for Coram Road, Bombhole Crescent, Riches Avenue and Sear Close.

[AndyF]

I don't think Octagon has done anything great for the circuits in the past few years, but at least their futures had been relitavly safe. I can see Oulton, Silverstone and Brands surviving without a problem in the future, although I'm now a bit worried about Cadwell and Snetterton.

[alfaman]

Yes that was my point entirely.

It's fine if the circuits are sold off to people similar to Howard Strawford - but if they go to Barratts or Bellway or become an industrial estate then that would be a tragedy.

[Stephen Green]

The rumour I heard before Christmas was that Brands Hatch had been bought by B Ecclestone and that Nicola Foulston was going to be brought back to run it for him. The rumour also had it that Snetterton was being bought by a large racing club, Oulton sold for housing development and no news on Cadwell Park.

What I find strange is that since the rumours began, Octagon have invested some £7.5 million in their circuits?

[Stacy]

Originally posted by TimD
Well, given the nature of some of the rumours, the potential disaster would be driving up the A11 in a few years' time, and encountering turnoffs for Coram Road, Bombhole Crescent, Riches Avenue and Sear Close.

Bizarrely, the latest issue of Racecar Engineering which plopped through my door this morning details a "Centre of Excellence" for Snetterton, comprising motorsport industries under one roof. Apparently the East of England Development agency have given 25k to the study.

Not defacto of course, but I'd have hoped Octagon and the agency have at least conversed.

Hope so anyway, it would be a shame for Snett to go. The real reason is that if it was open market there could have been buyers. I'd have certainly considered buying a swathe of land in Norfolk, the only question is would you want to break a twenty.

;-)

Stacy

[Peter Mallett]

Ooh nasty!

Stacy I'm sending you a pm. Can you check it please?

[Piglet]

Originally posted by Stephen Green
What I find strange is that since the rumours began, Octagon have invested some £7.5 million in their circuits?

The question would be how much have they actually spent?? Words about future investment cost nowt... I'd want to see some cold hard cash spent before I believed too much....

But hey I'm just cynical!!!

[TimD]

In response to Stephen, I would be amazed (and mortified) if a housing development proposal would get past the Cheshire county planning department. Oulton's in a nice bit of parkland, and the good burghers of Tarporley would I'm sure prefer to keep it that way rather than see a housing development on their doorstep.

[Stephen Green]

Piglet, much work has been done at Brands over the winter months. As for the other circuits I can't say but hasn't Oulton got a new pit lane complex?

[pixie]

This is taken from Interpublic's website, and forms part of the Finacial Reports of the company which they are required to post with the American Securitiy Exchange Commission

Octagon Motor Sports

In the fourth quarter, Octagon management completed an in-depth cash flow analysis of its motor sports assets and concluded that the book value of Octagon Motor Sports significantly exceeded its estimated fair market value. Accordingly, the company identified $135.8 million of primarily non-cash charges to reflect the impaired value of the assets and other adjustments. Because the events that triggered the impairment occurred in the third quarter, charges of $132.1 million were appropriately recorded by restating the third quarter of 2002. As a result, the company expects to file restated reports with the Securities and Exchange Commission for the appropriate periods.

Interpublic's new management has retained independent advisors to evaluate exit strategies relative to its motor sports assets. The remaining book value of long-lived assets relating to Octagon Motor Sports is approximately $70 million at December 31, 2002. This amount, as well as other substantial contractual obligations, may not be fully recoverable depending on the exit strategy the company ultimately chooses to pursue

In 1999 Interpublic is rumoured to have paid $120 million for the Brands Hatch Portfolio............doesn't look good, If I were Interpublic I'd be looking to get out before losses got any bigger

[Chris Y]

If you read Octagon's website (front page news) you'll see that they've spent money on every circuit this year. Cadwell and Snetterton have had 'facilities' upgraded, such as toilets and entry roads. Brands we know about, and Silverstone's had a couple of million spent on it again this year. Oulton's just got itself a new pitlane complex, again costing a few million I think..

Not exactly housing estate material there..

[Dave Brand]

Originally posted by Stephen Green
Piglet, much work has been done at Brands over the winter months. As for the other circuits I can't say but hasn't Oulton got a new pit lane complex?

Oulton has, or is in the process of getting, a new pit lane complex. There will be a wider pit lane with more garages, with vehicular access from the paddock (vehicles could only be taken into the old garages via the pit lane) & new race control building. The circuit is also being changed, making what is, in effect, a resited Knickerbrook chicane.

This whole thing looks to me like a PR disaster. Work at Oulton started immediately after the last meeting last year.
The capital expenditure for all this work must have been authorised some time in the midddle of last year; why, with all the speculation & rumours on the future of the circuits, did they take until February this year to 'announce' how much money they were spending?

[Stephen Green]

It's interesting to see that Interpublic are now talking about their exit strategy in the press release. To me that indicates that the current expenditure on the circuits has been included in the write off in the balance sheets. I would have thought the strategy would prevent any new capital expenditure from being authorised?

[Dave Brand]

Originally posted by Stephen Green
To me that indicates that the current expenditure on the circuits has been included in the write off in the balance sheets. I would have thought the strategy would prevent any new capital expenditure from being authorised?

As the analysis & revaluation was done in the fourth quarter I would think that you are correct in your first assumption. From the timing of the work at Oulton I think it reasonable to assume that the capital had been authorised & contracts signed before the end of the third quarter; something of a fait accompli by the time they got round to doing a reality check!

[Peter Mallett]

The thoery that because a contract is signed you need to proceed is not necessarily true. You can cancel (terminate) and just pay the real costs of the contractor. If the contracts are under one of the recognised forms then it would seem to me that they could signifcantly reduce their liability by not doing the works.

Therefore they are doing these works to provide something to sell.

Toilets at Cadwell? There's a novelty.

[Stephen Green]

Thats always assuming they unlock them so they are useable

[Chris Gray]

Peter - you mean the leaf-filled breeze-block structures at Cadwell are actually meant to be toilets!

[Super Tourer]

The dualling of the A11 makes Snett a much more attractive (and likely) site for development. Very worrying rumours that don't go away.