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Super Aguri on the brink as cars go back to Honda
By Phil Huff May 1 2008
Honda's customer team, the well liked Super Aguri, look certain to miss the Turkish Grand Prix with news that Honda GP Ltd have taken hold of the race cars and are currently storing them at the Brackley factory while the rest of the paddock makes its way to Istanbul for the Turkish Grand Prix.
The Super Aguri team, financed in part by Honda, are struggling for survival as the team failed to secure sufficient financing to stand on their own two feet, partly due to a major sponsor falling somewhat short on promised funding.

A recent buy out by the Magma Group, signed by Super Aguri, Honda, Magma and intriguingly Bernie Ecclestone, fell through during the due diligence stages. Super Aguri co-owner Fumio Akita said "We were banking on Magma's buyout but they turned it down. It feels like being jilted by a lover."

The deal was subject to the team surviving until the completion of the due diligence process, and was to remain strictly confidential, so Leach was somewhat surprised to find journalists stating the facts of the buyout before the Australian Grand Prix. Whether he liked it or not, he was going to be (at least in the public and media eyes) the owner of the team. It was, therefore, an extremely brave move on his part to pull out of the deal at this stage, and suggests that the numbers simply didn't stack up.

Our research suggests that Super Aguri spent somewhere in the region of £50m ($99m/€63m) last year in total, and most of that was support from Honda rather than cash. It also accounts for just circa 20% of Honda's budget. For comparisons sake, Honda Racing F1 spent £31m ($62m/€39m) on staff costs alone in 2006 - or over 60% of Super Aguri's entire budget. With the looming ban on customer cars, and a facility that is simply not capable of producing their own Formula One car, Super Aguri's future has never been certain.

Formula One needs Super Aguri for various (mostly financial) reasons, and the fact that Bernie is a signatory is surely no accident. While Super Aguri's troubles have been eased slightly this season with some additional financial support on a race-by-race basis, assumed to be coming from both Ecclestone and Honda, the Japanese giant has revealed that the additional support must stop.

Super Aguri are now believed to owe Honda somewhere in the region of £30m ($60m/€38m), with all of that secured on the assets of the Leafield based team. With very few assets (even the factory is leased rather than owned), it now appears that Honda have chosen to recover what they can while they can.

However, an old Formula One car, even a recent model, in cash terms isn't worth a great deal of money, so it remains to be seen what else can be done to recover the debts. One therefore has to consider other options; could this simply be a case of preventing Super Aguri running up more debts? By missing a race the team (and therefore Honda) could be left open to significant financial penalties but, with the commercial side of Formula One, the infamous Concorde Agreement, currently being somewhat unclear, perhaps a decision has been made to take the risk and argue about the penalties later.

Another buyer is in the frame, German automotive company Weigl Group, so keeping the team alive for now is paramount. Weigl boss Franz Josef Weigl met with Super Aguri at the Spanish Grand Prix, and talks with them and other investors are ongoing. Aguri Suzuki is also meeting with the Honda Motor Co Ltd board of directors next week in a last ditch attempt to secure more funding and, more importantly, more time.

The next week is critical. Our fingers are crossed.

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