Who owns the REC's?

[eduardo1]

Originally Posted by Casper

You don't want to see the point.

Wrong and rather insulting actually. I was discussing it with you and being polite about it. I'd appreciate the courtesy being returned in the future please.

Originally Posted by Casper

If the seller can't recoup the capital cost he is not going to buy in. The income derived has not got anything to do with the recovery of the capital cost on the way out though if a loss occurs that capital loss is a tax deduction. No one makes an investment to lose their capital except if they go in intending to negative gear. I have never got the point of negative gearing for investments unless there is a huge increase of capital worth and the V8's are certainly not that. Separate the capital cost from the income side of the ledger, if you don't do that you will fail in business.

Now that I get your point, to sum up, if people can't make money they won't invest. Glad we've cleared that up, but is a definite tangent off what I was talking about.

To GT-R's post - pre-Archer they were going for an average of $1.5-2m with around 800K annual dividend per REC.

I don't know how far they fell post Archer, but there weren't that many changing hands at the time and some that did included team takeovers (FPR & SBR/Erebus).

Then the TV rights negotiation imploded at the end of 2012 and they fell in value further.

This is around the time that Dumbrell and Webb acquired second RECs, so I suspect they bought at the bottom of the market and TDA, as I said, has already made his money back from the Archer buy-out.

[GTRMagic]

Wonder if Dragon Motor Racing is in the market for one of the RECs?

[GTRMagic]

Does This Ad suggest that FFF isnt likely to tender to buy back their own REC?

[peckstar]

Originally Posted by GTRMagic

Does This Ad suggest that FFF isnt likely to tender to buy back their own REC?

you would think they might have moved on and found greener pastuers

[Just Do It!]

So the likely buyers are:

*Dragon Motor Racing
*Childress
*Penske/DJR (DJR remain hopeful)
*Super Black Racing

And what others???

[Axeman444]

will FAS get a gig?

[GTRMagic]

Originally Posted by Just Do It!

So the likely buyers are:

*Dragon Motor Racing
*Childress
*Penske/DJR (DJR remain hopeful)
*Super Black Racing

And what others???

AA this week suggests that there were as many as 12 expressions of interests in purchasing RECs, which translated to five firm indication of intent to proceed.

No mention of values placed on the RECs...

...and the only confirmed 'bidder' is that Super Black Racing is chasing a REC...

[GTRMagic]

Sounds like the REC clearance sale isnt going to happen as V8SC may have thought it would Story Here...

There is a story in AA this week that LDM had apparently protested by some legal means about the resale process, and that the withdrawal of the 3 RECs from sale may be a consequence of that activity.

More pragmatically, you might imagine that the expressions of interest received, and the accompanying offers for these otherwise redundant RECs, was considerably below their acquisition cost and/or what the existing holders imagined was fair market value

If the REC income stream is back to $350k and above as has been much rumoured, why would V8SC or the teams have to take a lowball bid of under $800k (as was mentioned in paddock rumblings earlier this year) for example

It now seems Ernst & Young may be discharged from their services operating the tender, such that interested parties would now need to deal with V8SC directly in order to acquire one of these licences to play

So SuperBlack will now likely need to go to V8SC directly, if their interest is still intact, as would Mr D'Alberto. Or indeed Penske, if this was an avenue they were looking at to enter the series.

Seems like the tender process didnt yield the result anyone was looking for

[Umai Naa]

Agreed. More money down the toilet for V8SC.

I wonder who actually decided they were being low-balled? V8SC, the REC owners, or E&Y?

Surely it's in V8SC's best interests to have more cars on the grid. Like any good catagory management group, they should be doing all they can to facilitate that.

[GTRMagic]

The thing is though, the grid may not be necessarily stuck at 25 cars again next season.

If the right price is reached, and the other probity questions are answered to V8SA's satisfaction, its more than likely a REC can change hands to a new owner.

[GTRMagic]

Looks like V8SC and LDM are cruising for a bruising..

V8SC Launches Legal Action Against LDM Regarding REC Sale Process



Wonder who LDM's 2015 'multinational sponsor' is for the second car.

[Mixer]

Wow its all pretty unattractive, you wouldn't want to be the multinational sponsor would you....

[Umai Naa]

Do LDM actually own the second car now?

Wasn't it reported that LDM were taking V8SC to court over the REC tender process, not t'other way 'round?

Seems to me that Mr L. Dumbrell is not happy with either the tender process, or the price he may have gotten for his REC, minus whatever the transaction fee was.

[Mixer]

So V8Supercar have had a win of sorts but also some very dodgy behaviour:

http://www.speedcafe.com/2014/10/16/...ter-judgement/

The court documents confirm that the LDI and Sanpoint RECs were subsequently sold by V8 Supercars Holdings to Australian Motor Racing Partners Pty Ltd, a related company of V8 Supercars and the second plaintiff in the case, for a nominal value of $20,000 each.

I guess you want all the facts but this doesn't sound good...

[rik]

Originally Posted by Mixer

I guess you want all the facts but this doesn't sound good...

Also interesting that they did not sell TDR's REC!

[GTRMagic]

Originally Posted by Mixer

So V8Supercar have had a win of sorts but also some very dodgy behaviour:

http://www.speedcafe.com/2014/10/16/...ter-judgement/



I guess you want all the facts but this doesn't sound good...

There is clearly a reason for the structure of the sale process to be in this manner, certainly there was a big 4 beancountery running the process that should have provided significant advice.

You can see that there is some risk to an asset as reportedly purchased for $1.5m or $1.39m being 'sold' for $20k, and waiting for the sale price to the ultimate purchaser to be much higher than this, presuming it happens.

But at $150k per round per non attendance, as per the REC agreement, each of these former REC holders would owe more than the value they paid for these items because they didnt use them in 2014....

It suggests from this article that TDR were actively working towards restarting the REC for 2015, and had gone thru the V8SC process to activate that REC for next season, while it appears that LDM and FFF did not take that path.

At some point, V8SC may simply ask FFF & LDM to 'put up or shut up' for them to enter a car for each of their their RECs next season...

[one five five]

Justice Pembroke criticised the drafting of V8 Supercars’ REC agreement in the ruling and noted that the sale “invites suspicion and warrants investigation”.

I guess this is what happens when you have agreements written "by the boys, for the boys"

[Samwhk]

Maybe someone with a better legal understanding can explain it. How can V8SC sell the RECs to an affiliated company for well over a million less than what the current owners paid? Surely someone out there; SuperBlack, Tekno, etc, would have been happy to cough up $20k if that's all they're worth now?

[old fart]

Obviously Peckstar didn't know about it or I am sure he would have robbed the piggy bank to get at least one of them!

[GTRMagic]

Originally Posted by Samwhk

Maybe someone with a better legal understanding can explain it. How can V8SC sell the RECs to an affiliated company for well over a million less than what the current owners paid? Surely someone out there; SuperBlack, Tekno, etc, would have been happy to cough up $20k if that's all they're worth now?

If the REC agreement that the teams have all signed contains just such a clause, then who is doing the misdeed, V8SA or the teams complaining about what they may or may not have signed up for. That's the impression you get from the opinion of the legal bods quoted earlier in the thread

Whether the consideration is a fair exchange would be the types of things to be tested in court.

[peckstar]

Originally Posted by old fart

Obviously Peckstar didn't know about it or I am sure he would have robbed the piggy bank to get at least one of them!

how do you become a millionaire in motorsport, Start as a Billionaire.

Not sure why you even mentioned my name to be honest.

[old fart]

Originally Posted by peckstar

how do you become a millionaire in motorsport, Start as a Billionaire.

Not sure why you even mentioned my name to be honest.

Pecky, we know you love V8 Supercars so don't understand why you have gone all shy or is it all a well scripted wind up?

No matter what it is an interesting situation exists with some worrying legal doubts about propriety and ethics.

[fomoco]

SO it the end , a REC is worth what the market will pay, V8SC"s are trying to get as much as possible for a REC and will do what ever than can, if a REC is handed in, and he company running the show decides to sell it for what ever price that is it.

Business is business, , same as Cash Converters , etc etc, it is all to what the market will pay, and to protect the integatory of the business.

Simple, if you don't have the money don't bother racing

[peckstar]

appears a REC is worth $500k per year for 6 years and then it is worth nothing

V8 SUPERCARS OWNERSHIP SHAKE-UP LOOMS

[GTRMagic]

Originally Posted by fomoco

SO it the end , a REC is worth what the market will pay, V8SC"s are trying to get as much as possible for a REC and will do what ever than can, if a REC is handed in, and he company running the show decides to sell it for what ever price that is it.

Business is business, , same as Cash Converters , etc etc, it is all to what the market will pay, and to protect the integatory of the business.

Simple, if you don't have the money don't bother racing

True enough, and if you sign up to participate in a series, and are contractually obligated to do so, and are unable to do so for whatever reason (funding in all 3 cases) then why would you hold an expectation that the value of your REC shall be maintained when there are actually fines laid out for non participation...

All it would likely take is for an offer somewhere around the buy price to each of the transient holders, and the REC would likely be sold...