Sponsor issues overshadow Williams flotation
Williams claims to have all sponsors in place for 2011 © Getty Images
Williams' planned Frankfurt flotation is apparently timely, with reports claiming the famous British team has lost 43% of its sponsors.
The team launched its 27% float in London with the shares on offer from set on March 2. In a statement issued beforehand, Williams said the share pricing valued the business at €265 million.
The statement said the team's "sponsorship is fully secured for 2011", with the floatation not designed to raise capital because "existing shareholders" - mainly Patrick Head - are selling up. Bernie Ecclestone commented: "If I could buy shares in the company I would."
But a less rosy picture was painted by a report in the Evening Standard, claiming that "new data" shows that Williams' recent "sponsorship income has reversed". The report said the 43% reversal from 2010 is the team's "biggest in the past decade".
"One of the key reasons that there have been so few flotations of motorsport teams is that winning races is usually their primary aim with making profits a bonus at best," Formula Money's Caroline Reid told ESPNF1. "As shown by Williams' accounts over the past five years, the quest for victory on track can often lead to heavy losses. In turn this reduces the company's value which is the last thing that shareholders want."
"The driving force behind the float seems to be that it brings new investors to the team but keeps him at the wheel. It remains to be seen how much the public would be prepared to pay to fund this."
Credit: ESPN F1 (espn.com)
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