Guyancourt, 22 November, 2001 - Under the authority of the Versailles Trade Court, Prost Grand Prix, the French Formula 1 team, is going to fight to be at the start of the 2002 World Championship. Prost Grand Prix: The French Project In 1997,...
Guyancourt, 22 November, 2001 - Under the authority of the Versailles Trade Court, Prost Grand Prix, the French Formula 1 team, is going to fight to be at the start of the 2002 World Championship.
Prost Grand Prix: The French Project
In 1997, Alain Prost, four-time Formula 1 world champion, accepted the challenge to build a French team by creating his own company : Prost Grand Prix. It was a huge endeavour, but the staff's motivation as well as the partners' commitment to success was limitless. Over four years, "les Bleus" as they are commonly called in France, built for themselves a place in the closed circle of Formula 1 teams and gathered all technical, human and financial means necessary to a promising start.
As one of the young teams competing in this high-level environment of international media magnitude, Prost Grand Prix was confronted with the natural consequences of its learning curve. But despite the difficulties they had to deal with, particularly during the 2000 season, the French team never ceased to build and consolidate : today it has reached maturity.
This season, strengthened by a first-class collaboration from motorist Ferrari and a three-year experience, Prost Grand Prix raced for points : despite a fragile financial context, the team was able to fight through the end of the Championship finishing in 9th place. This result not only proves, if need be, the team's legitimacy, but also confirms their reliability.
More than ever determined to hold their place in the Formula 1 World Championship to start on March 3rd in Melbourne (Australia), Alain Prost and his 250 team mates have already focused all their energy on conceiving and building the APO5, the car that will defend the colours of the team in 2002.
Prost Grand prix: the need to refinance
During its first three years of activity, Prost Grand Prix, showed positive results the first two, and was close to breakeven in the third year.
The unfavourable general economic context of 2001, added to the relatively poor results of the team during the 2000 season, had a severe impact on the company's budget balance. Nevertheless, the significant improvement of the team's sports results in 2001, plus the support of several partners and sponsors, as well as Ferrari's trust, allow Prost Grand Prix to already count on a significant part of its 2002 operating budget.
The initiation of the "Procédure Judiciaire" (a French judiciary process led by Trade Courts aiming at straightening up companies in financial difficulties), should give potential investors and sponsors the legal and financial security that will guarantee the company's future.
About Prost Grand Prix
Prost Grand Prix is a company owned directly or indirectly by Alain Prost (51.3%), the Diniz Family (40%), LV Capital (5.8%), and Yahoo (2.9%). Prost Development, the Financial Holding, controlled by Alain Prost (85%), is also holder of a shareholders current account of US$ 52 million in Prost Grand Prix's balance sheet.
22 November press conference
Alain Prost held a press conference on Thursday (22 November) following the revelation that Prost Grand Prix had gone into receivership. Here is a quick summary of the conference.
Prost thanked everyone for coming and was pleased to see so many people were interested the future of his team. Alain said that he and the team will continue to fight. Prost confirmed that the company went into receivership this morning in Versailles.
He said he wanted to have a French team that is competitive. "I'm still very motivated and excited about this project." No French Formula 1 team has never been World Champion although Renault came very close in 1983 with none other than Alain Prost as a driver.
He shared with the press that it has been a very difficult situation. The team was initially greatly helped by French sponsors. Financial difficulties were encountered particularly in September and October and maintaining the team and personnel was tricky.
Prost stated that the priority is the financing for the 2002 season. They are talking to a lot of potential partners for future financing. He confirmed that the company has liabilities of FF 200m ($30 million)
"We need to find a way of setting a good base again in order to control our liabilities. We need to present a plan which can ensure that we can appear on the grid for the whole 2002 season. This will depend on the offers that we receive. Our debt is FF 200m ($30 million) The ideal would be a large sponsor. That is what we have missed since the start. With a large sponsor we could get our problems under control."
Asked what would be his ideal situation for next year? He said he has about 50% of the budget guaranteed - most likely from TV revenues.
Talking about strategic decision making Alain said it is always easy to talk about the errors afterwards. He said that the management believed in the projects they had undertaken but perhaps the markets weren't strong enough.
In response to questions from the floor the Frenchman said the priority was to get the team out of its present mess and to stabilise things, and to maximise any resources they have and any sponsorship money that comes in. He said it is a complex legal situation. There will be some kind of agreement with the people that they (Prost) owe money to.
He confirmed that there are a lot of people in the team, but in terms of the scale normally found in Formula 1, the team was actually small.
The Prost Grand Prix boss outlined the difficulty in securing financing and sponsorship given their current financial predicament and the results for the 2001 season.
He acknowledged that the team had lost a few key people. But for those remaining there is solidarity within the team.