Nürburgring GmbH one step closer to bankruptcy

BMW at the 2012 Nurburgring 24 hour race

Following this morning’s update we can confirm Nürburgring GmbH is one step closer bankruptcy. Speaking earlier today Kurt Beck, Rhineland-Palatinate State Premier, confirmed the European Commission’s refusal to provide a €13m rescue package has forced his hand.

“With greatest probability, bankruptcy would be applied for, for the end of the month due to lack of liquidity,” Beck said.

Facing debts of €413m the ‘Ring only has assets valued at €126m, according to accounting firm Ernst & Young. That would leave publicly-owned holding company, Nürburgring GmbH, exposed to €287m of debt it cannot cover. Proving what a tangled and confusing mess this situation is Nürburgring GmbH’s largest creditor is the Rhineland-Palatinate state.

Administrators are likely to take control of existing contracts, including the German Grand Prix, which alternates on a biennial basis with Hockenheim. The Nürburgring is next due to host an F1 race in 2013.

Nürburgring Automotive GmbH, the management company handling the day to day running of the Nürburgring, has issued a press release saying it is not affected by the holding company’s insolvency. They have also sent out an internal memo to staff assuring them their wages are safe.

We’ll have more news as it comes to hand.

[Source: TheLocal.de & nurburgring.de]