>


Advertisement
Hot News
for your iPhone
for your iPad
Go to our forums to discuss this news
DATE News (chronologically)
04/14/10
nassprint
Petty Motorsports in default of $90 million loan  UPDATE #2 Richard Petty Motorsports, the NASCAR team owned by George Gillett, has been in default on a roughly $90 million loan since at least February but expects to soon restructure the obligation, sources said last week. The default on the debt underscores the harm NASCAR suffered from the economic collapse of late 2008 and, in particular, the impact of contraction among Detroit's Big Three automakers on race teams. Gillett, who last year sold the Montreal Canadiens and still owns half of Liverpool FC, lost Chrysler's backing of his race team when that company filed for bankruptcy protection. Ford is now supporting the four-car team. Gillett declined to comment on specifics of the restructuring because of the ongoing creditor talks, but he emphasized the default is technical in nature, meaning that he did not miss a payment but, rather, failed to meet terms of at least one covenant. Loans commonly have covenants that might, for example, require the borrower to sustain a certain level of cash flow. Prior to the economic troubles of late 2008, lenders were relatively lenient with these kinds of defaults, but they since have become more stringent and less forgiving. One finance source, who requested anonymity because of knowledge of the deal, denied Gillett's characterization, insisting the default was payment-related. Sports Business Journal / Fox News

04/13/10 Richard Petty Motorsports agreed Monday night to a deal that would restructure the debt of the company, a source close to the situation told ESPN.com on Tuesday. According to the source, the deal is subject to final signatures and that 10 of the 11 banks involved in the restructuring have agreed to terms. This comes on the heels of a report that RPM, owned by George Gillett, has been in default on a loan of about $90 million since February. The source said the loan is closer to $70 million and that it was allowed to lapse with the hope that it would provide leverage with the banks to restructure. Had the banks opted to foreclose on the loan they could have taken possession of team assets and some revenue from sponsors, but none of Gillett's personal assets. Gillett would not comment on specifics of the deal but said RPM has no plans of going under. "I don't think we'll just survive, we'll thrive," Gillett said. Gillett said RPM is operating in the black and making a profit. He said debt incurred over the past few years is the result of trying to survive in a tough economy that saw RPM lose financial support from Chrysler, forcing the move to Ford, and sponsors. "When you look at some of the curveballs thrown at us they're substantial," Gillett said. "Yet we've overcome them. We've overcome the loss of all that revenue from sponsors and Chrysler. Based on everything I know our intention is to restructure the debt, enter into an agreement with banks and buy out the debt with new capital that our family would put into and end up with a company that may end up a few million in debt but end up with a company that is fundamentally debt-free," he said. ESPN

04/12/10 Richard Petty Motorsports, the NASCAR team owned by George Gillett, has been in default on a roughly $90 million loan since at least February but expects to soon restructure the obligation, sources said last week.

The default on the debt underscores the harm NASCAR suffered from the economic collapse of late 2008 and, in particular, the impact of contraction among Detroit’s Big Three automakers on race teams. Gillett, who last year sold the Montreal Canadiens and still owns half of Liverpool FC, lost Chrysler’s backing of his race team when that company filed for bankruptcy protection. Ford is now supporting the four-car team.

“This is a very positive story,” Gillett said. “To lose Chrysler but regain the revenue and not go into the red, and the company is very healthy, that is an amazing story.”

Wachovia, which leads a syndicate of about a dozen financial institutions that issued the loan, declined to comment.

Gillett declined to comment on specifics of the restructuring because of the ongoing creditor talks, but he emphasized the default is technical in nature, meaning that he did not miss a payment but, rather, failed to meet terms of at least one covenant.  More at Scenedaily.com

Hot News Archives
2000 2001 2002 2003
2004200520062007
2008200920102011
2012201320142015

Search Hot News
Search Help