On the surface of it, it would seem that the Williams F1 team have been given a serious infusion of cash in order to weather to COVID-19 storm and remain a solvent entity within Formula 1. That’s on the surface of it, as I said.
Without the actual contract, it is difficult to know just how deep this loan goes with its covenants but what we do know is that Canadian businessman Michael Latifi has just provided a significant loan to Williams.
On one side, perhaps not a big surprise as Michael’s son, Nicholas, is a driver for the team and 2020 is to be his rookie year if the series ever starts having canceled the first 9 races of the season. Latifi also acquired 10% of the McLaren F1 team in 2018.
Williams deputy team principal, Claire Williams, said:
“Following the sale of WAE at the end of 2019 we began a refinancing process,” deputy team principal Claire Williams, daughter of founder Frank, told motorsport.com.
“We have now concluded our refinancing with a consortium of lenders, all of which was negotiated on an arms-length commercial basis. The loan package provides us with the resources that we need moving forward.”
Claire called it an arms-length deal but for me, it sounds like an asset acquisition purchase. In the US, assets acquisitions occur a lot in company buyouts and it leaves the liabilities but purchases all the assets.
The loan is estimated to be in the neighborhood of 50 million pounds. What is more important is that, for me, this could actually be the first step in a complete purchase of the team which posted a 20.9 million pound loss on 77.8 million in revenue in the fist half of the year.
The collateral for this loan is said to be the heritage racing cars, a mortgage on the property and buildings as well as factory plant and machinery. I also read that it included the team’s contract to race in F1 but that was not corroborated by the Reuters article. To be, this is effectively a buyout although the publicly traded company is majority owned by Frank Williams with 52.3% of the shares.
I think it will be difficult to service that debt and the team could find itself in a sort of personal receivership to Latifi should they default on the loan but details of that loan were not shared. In the long run, this team could be yet another Canadian team in Formula 1 with Lawrence Stroll owning Racing Point.
North America is certainly putting its foot on the neck of the UK’s premier racing series with the series being purchased by American media giant, Liberty Media, and now two of it’s 10 teams being purchased or heavily leveraged by two Canadian billionaires. American, Zak Brown, is at the helm of the very British team McLaren, who also have Latifi as a 10% owner, and an American CNC machine company CEO, Gene Haas owns a team called Haas F1.
The Uk, dear friends, is losing its sport to North Americans. The simple question I have is, where are all the UK billionaires to buy the sport, teams or more? On the other hand, their lack of interest could be the mere fact that they know something these folks from North America don’t. Maybe they know it’s a dodgy investment.
Maybe the UK billionaires are going all Rory Breaker on this deal…if the milk turns sour, I ain’t the kind of p**** to drink it.
Hat Tip: Motorsport and Reuters
Plausible is all i’ll say on the eventual outcome of this. On the other note though, regarding ownership coming more from North America than Europe, that is undeniably true right now but I’m not sure it really matters that much which nationality owns the teams. Whether its Austrian, Japanese, German, US, Canadian, Russian, Italian or any other nation, they still focus on having a base in either Britain or elsewhere in Europe were the supply chain, expertise and interests lay. I know the states has the capability as does Canada, not denying that but its primarily geared towards supporting other… Read more »
In short, I don’t really foresee teams upping sticks and moving to Canada anytime soon.
I wasn’t implying they would move to Americas, I am just saying that the North American investment and ownership of F1 is interesting and I am curious why no UK investors are making bigger moves for the sport.
Ahh, sorry. I guess they saw too often that a very large fortune becomes much smaller when you invest in racing heh ;-) I did have a think though on this and I’m not sure I can name many UK investors going back a long time who have publicly made big moves in the sport as purely an investment vehicle. We’ve loads who have invested in building teams with the aim to go racing etc and built an empire out of it, or like Bernie who built wealth out of the commercialism of motorsport but most were present already within… Read more »
Maybe they are busy buying football clubs. ;)
So Todd, now that Williams is for sale, can you put enough zeros together and give The International a seat alongside George Russell?
I think Paul would be a great teammate for George because he would teach him the finer things about avoiding beer in green bottles.