LONDON: Three days after Sahara Force India was put in administration by London’s High Court on Friday evening, a decision triggered by the Silverstone-based Formula 1 team’s Mexican driver Sergio Perez, supported by engine supplier Mercedes and team sponsor BWT, attention is firmly focused on who would be the likely new owners.
While media reportage in the UK has speculated that the developments were an orchestrated coup to remove Mallya, Perez told the BBC: “The team asked me to do it. Otherwise, it would have been very bad.”
Perez told reporters at the weekend that he had acted to save the team, and 400 jobs, from the threat of being closed down in the face of a winding-up order scheduled for the London High Court last Wednesday.
Taking Perez’s comments at face value, the primary matter of interest is what would be the debt burden that the new owners would be taking on in Force India, where fugitive business tycoon Vijay Mallya has a 42.5% stake, with a similar shareholding in the hands of Sahara Group, another debt-laden Indian company, and the remainder owned by Dutch businessman Michiel Mol.
In a letter to Force India employees, accessed by Reuters, Mallya confirmed Perez had filed the petition, with BWT stating that their sponsorship amounts were only loans.
Mallya also identified the largest creditor as the team’s own holding company which he said was owed £159 million compared to the largest (BWT) of the smaller creditors being owed less than £10 million.
“We shall be engaging with key stakeholders on an urgent basis to secure the best outcome for creditors,” said Geoff Rowley, representing joint administrators FRP Advisory LLP.
FRP Advisory LLP are the same firm that acted as administrators for the now-defunct Manor Formula One team, which folded before the start of the 2017 season.
Reuters quotes Mercedes team boss Toto Wolff as telling reporters that were five interested parties who could now take over the team but it would be for the administrators to decide which was the best long-term prospect.
“We as Mercedes are interested spectators of the process,” he said.
“We would like to understand what the funding strategy going forward from a potential new buyer is, how it could affect the collaboration between the two teams. We aren’t there yet.”
As well as providing the engines to the team, Perez’s French team mate Esteban Ocon is also backed by the German manufacturer.
He is tipped for a move to Renault while Perez’s future remains uncertain, Reuters reports.
Force India’s problems are well-documented, with Mallya having assets frozen in India and fighting an attempt to extradite him from Britain to face charges of fraud, which he denies.
A group of Indian banks are seeking to recover more than $1 billion of loans granted to his defunct Kingfisher Airlines.
