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Nurburgring aid under scrutiny

2012-08-10 11:09

NURBURGRING NOT YET OUT OF THE WOODS: The future of Germany's Nurburgring circuit remains in the balance as investigators have launched a probe into the state aid granted to the circuit.

 

BRUSSELS, Belgium - European Union competition regulators on Wednesday stepped up their investigations into state aid granted to the Nurburgring race track in Germany, which hosts the German Formula 1 Grand Prix.


The European Commission said the extended probe would examine several additional financial measures provided in May to help avoid an immediate insolvency.


FINANCIAL TROUBLE


Nurburgring GmbH, 90% owned by the state, ran into financial trouble amid a dispute with the track's operator over leasing fees, and the German state of Rhineland-Palatinate has sought to restructure the company with the help of a bridge financing package.


The measures included rescheduling interest payments on previously awarded loans and, possibly, an additional shareholder's loan to keep the race track and its operator in business for six months during which a restructuring plan would be drawn up.


Rhineland-Palatinate is under pressure to make the track pay after pouring millions of euros into a racing-themed amusement park there.


Nurburgring, located about 120 km northwest of Frankfurt, alternates the German Grand Prix with the Hockenheimring, host to the event in even-numbered years. It was the scene in 1976 of the fiery crash of then reigning F1 world champion Niki Lauda, which almost killed the Austrian. The track is also used by automakers to test cars.


NOT 'VIABLE WITHOUT STATE SUPPORT'


The EU watchdog said in a statement: "At this stage, the Commission has doubts that the measures were granted on market terms and that the companies are viable without continued state support."


It said the latest public support was linked to 524-million euros (R5.27-million) of state aid granted by German authorities which it has been investigating since March to see if they had been given on market terms.


Public authorities can only provide financial support to troubled companies once in 10 years under EU state aid rules.


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