I’ve never been a great believer in astrology. However, today’s forecast for ‘Capricorn’ might just be about to come true. “Things from the past may get dredged up again – both literally and figuratively.”
Back in March of this year, the much troubled Nürburgring, which had been in the hands of the Administrator, despite having received hundreds of millions of Euros of aid from the regional government, was sold to German auto parts firm, Capricorn Group. Capricorn were to pay a reported €77m for the legendary road and grand prix circuit, together with all of its facilities, and were also to invest a further €25m into infrastructure.
Seven months on and it appears the three main characters involved in the sale, Capricorn’s boss, Robertino Wild, and restructuring lawyers, Thomas Schmidt and Jens Lieser, have got themselves into a bit of a pickle.
There are two very dark clouds currently hanging over the Eifel. Firstly, the EU Commission has judged that financial aid worth €456m (£362m), granted mainly by the German state of Rhineland-Palatinate to the racetrack, was in violation of EU rules. EU Competition Commissioner, Joaquin Almunia, said that financial assistance was only allowed if it serves to “restructure a company and help it to become viable again, not keep them afloat artificially.”
In the case of the Nürburgring, he pronounced that “the aid clearly violated the [EU] rules”, resulting in the commission ordering that the money be repaid. In the grand scheme of things, this wouldn’t necessarily be disastrous; across Europe, many decrees from Brussels are duly given much consideration before being filed in the shredder.
But what is more damning is that Dr Wild appears to have fallen well short of sticking to his side of the bargain. Indeed, from what I can gather, only one small payment of around €5m was made by a third-party on Capricorn’s behalf, and that’s about it. Moreover, it’s alleged that guarantees on property that were given are worthless as there is already a sizable list of creditors with preferential claims.
This now leaves the Nürburgring and its former administrators staring bleakly into the prospect of a potential fire-sale.
If Capricorn doesn’t honour the contract by the end of this month, the administrators will have no option but to re-take control, yet under governing law, will have just four months to find a new buyer and complete the transaction.
If they don’t, and with no prospect of further state aid, then the roar from the Grüne Hölle could well be silenced for a very long time to come.