x Abu Dhabi, UAESaturday 22 July 2017

For sale: 30 used racing cars

The stock cars were recently listed for sale as part of the liquidation process for the Speedcar racing series, which Union Properties launched in 2008.

The series was part of Union Properties' bid to create racing events at its MotorCity project.
The series was part of Union Properties' bid to create racing events at its MotorCity project.

The roaring engines long since fell silent and the smell of burning rubber and high-octane fuel is little more than a fading memory. The 30 racing cars gathering dust in a warehouse at the Dubai Autodrome represent a major disappointment for motorsport fans - and a major liability for the developer Union Properties.

The stock cars were recently listed for sale as part of the liquidation process for the Speedcar racing series, which Union Properties launched in 2008. The Dubai developer is facing a potential loss of more than Dh140 million (US$38.1m) on the venture after reporting its worst quarterly loss last week. The racing series "was popular but it ultimately required funding and the funder ultimately decided it wasn't to continue. It wasn't within its core business," said Tim Bramston, a partner with Griffins, an insolvency firm hired to manage the sale.

Speedcar International, a holding company created by Union Properties, folded with liabilities totalling Dh153m, with the parent company as its largest creditor. The developer is owed Dh141.3m, according to Griffins. Other notable creditors include the former Formula One drivers Johnny Herbert, who is owed upwards of Dh621,000 and Heinz-Harald Frentzen, who is owed Dh476,000. A Union Properties spokesman confirmed the liquidation but the company declined further comment.

On its website, Union Properties describes the Speedcar Series as featuring "globally renowned drivers, roaring engines, incredible driving prowess, white-knuckle competition, an audience of billions and US$3m in prize money". Speedcar attracted seven former Formula One drivers in its two seasons until the tournament ended for good in June last year. The races were part of the developer's bid to create a series of racing events at its MotorCity project in Dubai, which includes a 5.39km race circuit. But the global property recession and tightened lending at local banks have put the company under pressure. It is attempting to sell some of its assets, such as a Ritz-Carlton hotel near the Dubai International Financial Centre and a stake in the district cooling company Emicool.

Plans to create a Formula One theme park at MotorCity were scuttled last year after the company could not afford to continue construction. Union Properties executives said they would still build the theme park if funds could be raised. The expected loss on the Speedcar liquidation comes after Union Properties on Thursday reported a loss of Dh349.4m for the second quarter. It had a loss of Dh227.9m in the same quarter last year.

The racing cars are being advertised on Go-Dove.com, a website that specialises in the sale of unique properties. At the moment, the Speedcar assets are housed in a warehouse at the Dubai Autodrome. They are being sold as a single lot, meaning all 30 cars - as well as the support equipment - will go to a lone buyer. The cars, capable of up to 225kph, are not available individually. The support equipment includes communication systems, tool sets, clothing and "historical trophies".

Will Hancock, the operations manager for Go-Dove.com, said he hoped for a bid of $1.5m, a steep discount considering professional stock cars typically cost several hundred thousand dollars each to build. As the largest creditor, Union Properties would collect the majority of the proceeds from the sale but other creditors would receive a percentage as well. Mr Bramston said there had been interest from several potential buyers already, including some who aimed to continue the racing series in the Gulf and others who wanted to buy the spare parts for existing racing series.

"The trouble with this sort of thing is that the major cost is not the assets you are buying but the running costs thereafter, Mr Bramston said. The sale is being conducted as a "private treaty sale". Mr Hancock said there was not a formal deadline but it would be concluded within several months. breagan@thenational.ae