The company that operates Germany’s Nürburgring racetrack filed for bankruptcy in July, but the track got a last-minute reprieve. The state of Rhineland-Palatinate issued a $312 million loan guarantee to keep the “‘Ring” open.
The money will allow the Nürburgring’s owners to service a $406 million loan debt and keep the repo men away, for now. The track’s owner, Nürburgring GmbH, is $507 million in debt, but the track and the company’s other assets are only valued at $154 million. After being denied a 13 million euro rescue package by the European Commission, the company filed for bankruptcy at the end of July.
The move to use public money to save a privately-operated racetrack has not been popular. State governor Kurt Beck has supported developing the Nürburgring into a world-class tourist attraction, but previously said that no public funding would be involved. Now people are calling for his resignation.
The political situation is more complicated than it appears, though. The track is owned and operated by a private company, but the German government has a 90 percent stake in that company.
State aid comes after Formula 1 boss Bernie Ecclestone tried to rally investors to save the ‘Ring, including offering to buy the track himself.
Whether the Nürburgring’s salvation comes from a German state or Ecclestone, the 2012 season will continue as scheduled. Whether the track will be open in 2013 remains to be seen.
Normal operations at the ‘Ring include endurance races, open track days when enthusiasts can pay a small fee to take their cars or motorcycles for a lap, and rides in specially-equipped “taxis” for the less-brave.
Car companies also use the Nürburgring for testing; a fast lap time is one of the best ways to sell a production car. Audi recently tested its electric R8 e-tron at the track, and Cadillac is currently prepping the 2014 CTS there.
The Nürburgring is also well-known to millions of gamers who have driven it in Gran Turismo and other racing games.
Given the Nürburgring’s legendary status in the car world, it’s not surprising that the state government stepped in to rescue it. It may not be too big to fail, but the track known as the “Green Hell” just might be too important to fail.