24 May 2012
CotA investor McCombs pledges commitment
Billionaire Red McCombs insists that he is committed to the long-term success of the Austin USGP project, despite ongoing wrangles over his shares.
Circuit of the Americas investor Red McCombs has said that he has no intention of selling his stake in the project to originator Tavo Hellmund, and remains committed to funding the proposed home of the US Grand Prix.
The promise comes despite the billionaire businessman being caught in a buy-sell agreement with Hellmund's Full Throttle Productions, in which he has been given a deadline to decide between selling his shares or buying Hellmund's equivalent stake.
According to a letter recently sent from Hellmund's lawyers to McCombs, Full Throttle is offering to acquire the latter's 20 per cent share for $8m, while claiming that Full Throttle's slightly larger share would be valued at $8.2m. The letter claims that the buy-sell procedure, which had been incorporated into company policy, began on 11 January, with a 90-day period for response expiring in April. It also gave McCombs until 25 May to make a decision to purchase Hellmund's stake or consider his own as 'sold'.
With just a day before the latest deadline, McCombs told the Austin American Statesman newspaper that he would not be selling up and remained committed to his investment in the Circuit of The Americas project. Despite being 84, the billionaire said he had no qualms about the buy-sell arrangement, which only came to light as a footnote in a lawsuit filed last month by Hellmund against McCombs, Bobby Epstein and other investors.
“[There] never has been any question [about my commitment],” McCombs said, without revealing whether he had agreed to acquire Full Throttle's shares, “I'm there for the full ticket. That's just a little impediment in the way. I will say we do expect to have some resolution to those issues in a timely fashion - but, in dealing with the courts, I don't know what a timely fashion is.
"The big thing is the project itself. We've got a chance to do something very special. We're so excited about the opportunities that we have. I never dreamed that, at age 84, I would be taking on another major, role like this.”
Should Full Throttle acquire McCombs' stake, Hellmund's party claims that it could change the dynamics of the $300m project which McCombs claims is now nearing 60 per cent completion.
"Upon the consummation of the McCombs units ... Full Throttle expects to hold over 40 per cent of the equity of the company and have the power to appoint three of the company's five managers," the letter claimed, although that appears to be at odds with a statement issued by the circuit itself.
“Even if Mr Hellmund was to acquire his pro-rata portion of Mr McCombs' shares of Accelerator Holdings, that portion would represent an approximate two per cent interest in Circuit of the Americas," spokeswoman Julie Loignon noted, "As such, Mr Hellmund could not influence the seven-member board structure or management of Accelerator Holdings, let alone the board, management team or operations of Circuit of The Americas.”
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