'Nurburgring on the brink'
Circuit could be declared bankrupt according to reports
By William Esler. Last Updated: July 18, 2012 11:57am
The Nurburgring could be on the brink of administration according to reports in Germany, after the circuit was refused a bail out from the European Union.
The state government owns around 90% of the Nurburgring's holding company, Nurburgring GmbH, and leased the circuit to Nurburgring Automotive GmbH in a deal lasting until 2040.
The Social Democratic Party invested around €500million in redeveloping the circuit and improving facilities over the last decade, but, having lost their majority at the last election, will not invest anymore.
According to reports in the German media, the circuit's holding company also owes over €300million to the state owned Bank of Rhineland-Palatinate. Newspaper Rhein-Zeitung says the application to the EU for €13million was to service interest on the loan.
State governor Kurt Beck confirmed that the goverment were to launch insolvency proceedings as there is a, "high probability of insolvency at the end of the month because of a lack of liquidity."
He said his government decided to pre-empt that by choosing to launch "orderly insolvency proceedings."
Formula 1 is due to return to the Nurburgring next year as part of its deal to alternate the German Grand Prix with Hockenheim, which hosts the race this weekend.
However, with no money available to pay race hosting fees at the Nurburgring, and Hockenheim already stating they cannot afford to host the race each year, the future of the German Grand Prix could be in doubt.