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  Tuesday, 12 November, 2002, 17:20 GMT
Arrows claim lifeline
Enrique Bernoldi runs off the road in his Arrows last season
Can Arrows get back on track?

The troubled Arrows Formula One team has said that it is negotiating a rescue package with a group of German investors.

A statement issued by the team did not name the new investors and said that the deal "must remain confidential" until it had been completed.

The statement comes in the wake of a report in the Italian newspaper Gazzetta dello Sport that a company called German Grand Prix Racing has taken a majority shareholding in Arrows.

The report said the company was a front for unidentified investors from the United Arab Emirates.

The new buyers were said to have bought out Arrows' chief shareholder, the investment bank Morgan Grenfell Private Equity, and to have taken a controlling share of more than 51%.

But the situation remains confused.

The Arrows statement said only that agreement had been reached "for the introduction of substantial new equity into the team".

It added that the team had sought court protection to give it time to complete negotiations - Arrows were subject to a winding up order this week.

A spokesman for Deutsche Bank - which controls Morgan Grenfell - had earlier denied that the team had been sold.

"Talks are ongoing, but nothing has been sold yet," he said.

Arrows team boss Tom Walkinshaw
Walkinshaw is said to be staying on as team boss

He said he had not heard of the group that were supposedly involved in the buy-out, and that "not much has changed" since the team collapsed in the summer.

Gazzetta had said that team boss Tom Walkinshaw will be asked to stay on to run the team and retain a minority shareholding.

The paper quoted Oliver Behring - owner of Asset Trust Partners, the holding company of German Grand Prix Racing - saying the new owners did not wish to be known.

"They have bought more than 51% of Arrows, but I cannot say how much in total," Behring is quoted.

"In any case, the acquisition comprises and now goes beyond the shareholding of the merchant bank Morgan Grenfell, which is now out of the picture."

This is not the first time that Arrows have claimed to have found a new investor.

A similar statement was issued before the Belgian Grand Prix in August, only for the supposed deal to come to nothing.

Even if Arrows are sold, they face a number of serious hurdles before they can race.

They have no engine supplier and no title sponsor and many of the staff have left.

On top of that, Arrows could be barred from the championship on the grounds that they missed six of the last seven races last year.

Odds stacked against Arrows

F1's rules dictate that teams have to compete in all the races of a season or they risk losing their rights to compete.

The deadline for entries for the 2003 championship is 15 November, although the list is not published until the beginning of December.

The sport's governing body, the FIA, may well refuse any new entry from Arrows - or treat them as a new team and thereby demand a $48m deposit.

Even if the FIA does grant Arrows an entry upon payment of the standard 200,000 fee for existing teams, rule-making body the F1 Commission can exclude the team.

The F1 Commission includes representatives of the teams, who would all gain around $1m in TV and prize money if Arrows did not race.

That means the Commission would be likely to reject any application from Arrows.

 WATCH/LISTEN
 ON THIS STORY
BBC Sport's Jonathan Legard
"Arrows have no drivers or engine deal"

Road to nowhere

Analysis
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