LONDON: Sahara Force India’s sale to a consortium headed by Canada’s Lawrence Stroll is facing a challenge in London’s High Court by Uralkali, a Russian potash fertilizer producer and exporter, whose bid was spurned by administrators FRP Advisory despite making a much better financial offer.
As for why a chemicals company would have an interest in a Formula One team, Dmitry Mazepin, father of Force India development driver and GP3 racer Nikita Mazepin, is a non-executive director at Uralkali.
Incidentally, Stroll’s interest in Force India is also linked to the fact that his son Lance is an F1 driver (he drives for Williams and will be moving to the team next season).
“Despite Uralkali’s generous offer for the business and assets, which we believe was the best bid on the table, the administrators chose to enter into an exclusivity arrangement with another bidder and subsequently refused to reengage with Uralkali,” the company said in a statement.
According to Uralkali, FRP subsequently acknowledged Stroll’s winning bid “was significantly lower than Uralkali’s”, which prompted the decision to begin legal proceedings.
Motorsport.com quotes Uralkali as stating that the administration process contained “misrepresentations and lack of transparency” and “failed to achieve the maximisation of sale proceeds for the benefit of creditors, shareholders and other stakeholders”.
The statement further asserts it made what it calls “an extremely generous offer to acquire the company`s business, assets and goodwill”, tabling a cash consideration of between £101.5 million and £122 million.
This would have satisfied creditors, which included engine supplier Mercedes, in full and paid the administrators’ costs, as well as backing a five-year development programme, according to the Uralkali statement.
It also claims more than £40 million would have been left after those payments to distribute to Orange India Holdings Sarl, the Luxembourg-based subsidiary of United Breweries that owned and operated Force India.
This would have been held subject to the terms of the freezing order issued by UK’s High Court against Vijay Mallya, the fugitive Indian business tycoon running the team since its inception in 2007, in favour of 13 Indian banks.
The administrators The consortium led by Stroll, which eventually bought the assets and re-entered the team as Racing Point Force India.
Uralkali asserts its business rationale for trying to buy Force India was to market the company, as it services 20 of the 21 host countries in F1.
Paul James Ostling, senior independent director and a member of Uralkali’s board for seven years, led its bid for Force India.
He was quoted by motorsport.com: “Because of these concerns and the costs of our bid, as well as potential large business revenue losses, Uralkali has no option but to launch these proceedings and seek substantial damages.”
In its response, FRP stated: “The Joint Administrators to Force India Formula One Team Limited note that Uralkali issued a press release this (Thursday) morning detailing how a claim has been issued against us in High Court in London. No such claim has been received by us or, as far as we are aware, by the Court. If a claim is issued it will be defended vigorously.
“We have fulfilled our statutory duties as administrators throughout this process and ultimately achieved a very successful outcome for all stakeholders. Any legal action brought against us will be defended vigorously, and we are confident it would be dismissed.”
