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Thread: Force India goes into administration

  1. #1
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    Force India goes into administration

    Force India went into administration on Friday evening after a hearing at the High Court in London.
    The process in effect allows the team to carry on operating while a deal is concluded with a potential new owner.

    Deputy team principal Bob Fernley, who stayed in London for the hearing instead of travelling to Hungary, told Motorsport.com last night: “An administrator was appointed by the court for Force India F1 this evening.”

    No other official comment has been forthcoming from the team thus far.

    Force India has faced an increasingly tight financial squeeze this season, with driver Sergio Perez calling the situation “critical” on Thursday, especially as the team couldn’t afford to bring developments to the car.

    The team has owed money to several creditors, notably engine and gearbox supplier Mercedes and Perez himself. It’s understood that both parties were involved in the action that led to yesterday’s developments.

    Several potential buyers and investors have been connected to the team in recent months, notably Lawrence Stroll. COO Otmar Szafnauer said on Friday that news was expected soon.

    “I think it's imminent,” he said. “I know there's discussions going on in the background and I'm not privy to those because it's a shareholder issue. I'm not a shareholder otherwise I would know more. It will be very soon.”

    Main shareholder and team principal Vijay Mallya has always maintained that he wasn’t actively trying to sell the team, but that he would have to consider a serious offer. However earlier this month he insisted that no acceptable buyer at the right price was on the horizon, and that he was waiting for the right deal to come along.

    “Whether it’s a sporting business a service business or any other business, there’s a value,” he told Motorsport.com at the British GP.

    “If somebody comes up and offers you a damn good price and a very good value, you must learn to get rid of the emotion, put on a commercial hat, and look at it seriously. Because such an opportunity may not come again. I had no such proposition in front of me. I want to see cash on the table.

    “Until I see cash on the table, I don’t believe anything. In 10 years in F1 there have been too many people coming and wanting to buy the team. Everyone who walks through this paddock suddenly wants to own an F1 team.

    “They don’t realise the hard work involved. If it was like the old Spyker quite content to run around in 21st and 22nd with no ambition to get out of Q3, then fine. But for a team like us it’s bloody hard work for everybody.”

    Asked about the situation with Mercedes he said: “All I can say is Mercedes got a fat cheque two weeks ago.”##

    https://www.motorsport.com/f1/news/f...ation-1064873/


    Think Stroll will buy them. Then we may see Ocon and Stroll driver lineup
    CAVALLINO RAMPANTE PER SEMPRE

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    Force India driver Sergio Perez is behind the winding-up petition against the team over a $4m debt.


    Perez behind legal proceedings to close Force India over $4m debt

    A company linked to Sergio Perez is behind a winding-up petition against his Force India team over an unpaid debt, RaceFans has learned.


    The Silverstone Formula 1 team was the subject of a winding-up petition on Wednesday initiated by a Guernsey-based company known as Brockstone. According to a high-level source the company is linked to Perez and his manager Julian Jakobi.


    Jakobi refused to comment on the development. Perez, who yesterday described Force India’s financial situation as “critical”, did not take part in a scheduled media session at the Hungaroring this afternoon.

    Perez’s legal team told the court on Wednesday that Force India “is or is likely to become unable to pay its debt” and its parent company “are unlikely to be able to provide financial support”, according to documents seen by RaceFans. He is seeking payment of over $4 million (£3 million).

    The winding-up petition was brought now to allow the team the opportunity to appoint administrators ahead of the F1 summer break and minimise disruption to the team.

    Putting the team in administration and allowing it to continue operating will give it the best chance of being able to repay its creditors, the proposed administrators told the court.

    The application was also supported by the Daimler/Mercedes group, which Force India owes over €10.5 million (£9 million), and sponsor BWT. The latter alleges its sponsorship deal with Force India was in the form of a loan.


    https://www.racefans.net/2018/07/27/...-over-4m-debt/

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    Sad state of affairs for this this team. They are'nt like HRT, Caterham, or Marussia/Manor. They are one of the best points-per-dollar team on the grid. Better than Mercedes, Ferrari and RedBull given their budget.

    Then with all the crap going on with their owners.....one in prison, the other facing extradition to his home country to face trial....they still manage to rise above it all.

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    Force India is now under creditor protection. Five parties claimed interest in taking over the team. Over the next 28 days, the administrator will choose a buyer. [AMuS]

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    Why Perez took action against Force India

    The Sergio Perez-led action that put the Force India Formula 1 team into administration was instigated to give it the best chance of a credible survival plan.
    Force India went into administration on Friday after action brought against the team by its driver Perez.

    This was supported by creditors including Mercedes and team sponsor BWT.

    Force India and Mercedes are in the 10th year of an engine supply relationship that has grown to include Mercedes placing its junior driver Esteban Ocon at the team alongside Perez, who has been with Force India for five years.

    While Perez brought the petition in conjunction with his manager Julian Jakobi over unpaid funds, Mercedes is involved as all company creditors are asked if they wish to support such a petition or not.

    Mercedes, which also supplies gearboxes to Force India, claims to be owed more than €10.5million across the F1 team, its engine division and parent company Daimler.

    BWT, which joined as Force India's title sponsor at the start of 2017 and has connections to Mercedes, has claimed its sponsorship came in the form of loans.

    The logic behind the move and the support it received is the team needs to establish a viable strategy to settle with creditors and shore up its long-term future.

    Vijay Mallya, Force India's current primary shareholder, had stated earlier this month at the British Grand Prix that he was yet to receive what he viewed as a satisfactory offer to buy the team.

    Moving into administration takes control of the sale of the team away from Mallya and the holding company Orange India Holdings Sarl.

    To that end, Force India's administrators, Geoff Rowley and James Baker of FRP Advisory LLP, have already pledged to work on "an urgent basis to secure the best outcome for creditors".

    Force India faced a hearing on Wednesday this week on whether it would be 'wound up' over unpaid debts, but this was then overtaken by an administration hearing on Friday.

    That was triggered by Brockstone Limited, a company involving Perez, and included an offer from British company Rich Energy, which claimed it had pitched a £30million sponsorship agreement.

    This offer was dismissed and the team was placed in administration, which Rich Energy called a "tragic and avoidable outcome" and labelled the involvement of Perez, Mercedes and BWT "disgraceful".

    Motorsport.com understands the offer from Rich Energy, which had previously been dismissed by the team as a credible outright buyer, involved two £15million installments and was viewed as insufficient to guarantee the long-term future of the team.

    Legal action would only have been prolonged, and administration was viewed as the best chance of the team achieving more than a stay of execution.

    The team will continue to compete this weekend in Hungary, and the timing of the move affords it three weeks during the summer break to make progress with its financial situation before the Belgian Grand Prix, with minimal interruption to its on-track efforts.

    A request from Motorsport.com to Perez's camp and Rich Energy for comment has not yet been answered.
    CAVALLINO RAMPANTE PER SEMPRE

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    ^^^^Vijay is out. Maybe it was advantageous for Perez (to exercise the administration) and the whole team of Force India to go into administration?? There are 5 potential buyers. If I was Mercedes and wanted a junior team, I would buy Force India and NOT Williams.

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    Slater reports that Lawrence Stroll has made a fund contribution to Force India and wages will be paid on time to the entire team next week.

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    excerpt

    "The Rich Energy bid, which is supposed to be supported by publishers-turned-sport entrepreneurs David Sullivan and David Gold, may still make a play for the team but with the judge having been so dismissive it would need a very convincing package.

    There is believed to be another bid from a New York private equity fund called Castle Harlan, which may involve the Mexican-American Tavo Hellmund. There is also a bid by Rockefeller Capital Management (RCM), a subsidiary of Viking Global Investors, a hedge fund based in Greenwich, Connecticut, which has around $28 billion under management. RCM has ambitious plans to increase its portfolio and recently helped the celebrated baseball player Derek Jeter buy the Miami Marlins baseball team. There may also be a bid from Michael Andretti, with support from a private equity group, which may or may not be linked to one of the above.

    The big question now is whether or not we will see some changes before the F1 circus gathers again at Spa, with the suggestion being that Esteban Ocon may be in a position to leave and move to Renault, displacing Carlos Sainz. There have been rumours for several weeks that Sainz could be on his way to McLaren and even suggestions that this could all happen immediately. There is also the question of Lawrence Stroll, who is often touted as being a possible buyer of Force India. It is more likely that the canny enterpreneur will not buy the team but may provide convertible loans to keep the business running healthily and will then cash these in when the team is sold by the administrator. This would make way for Lance Stroll to switch out of the mess at Williams and get into a more competitive car at Force India. This would then open the way for Mercedes protege George Russell to join Williams. He would fit the Williams profile as a rising British star, but the key question there is how this would be funded. There is increasing talk of Williams doing a deal to buy more Mercedes technology rather than doing it all themselves and one can imagine that Russell's involvement would be aided by Mercedes."


    "Having said all of this, the situation remains fluid and while F1 may have seen the last of Vijay Mallya and his business partner Subrata Roy of Sahara, his adventures are far from over as he is due back in court in London next week to face extradition charges. "

    https://www.motorsportweek.com/joesaward/id/00281

  9. #9
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    It's dog eat dog in F1 and when you're down on the dumps, the people you beat are not as foregiving....

    "In order to keep their performance prize money bonus after a takeover by new owners Force India needs agreement by all other teams. But McLaren, Williams & Renault denied that approval and put the rescue at risk." [Tobi Gruner]

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    The powers that are will probably save Force India one way or the other but if they fail to do so then how about this idea. It leaves 18 cars on the grid. Let Ferrari, Mercedes, Red Bull, Renault and McLaren enter a third car. If it's too expensive for some teams to do that at every race then let every team enter a third car at 8 races each on 20-race calendar like next year (no Germany). Meaning two teams will have a third car at every race and then the grid will have 20 cars at every race. Liberty was talking about having some sort of a NFL draft type of thing happening. Teams could "draft" the 8 races each for the circuits they wish to enter their third car. For instance, Ferrari picks Monza, Mercedes picks Barcelona, McLaren picks Silverstone etc and so on. Until they've all picked 8 circuits each. But for fairness no race would have more than two teams running a third car which would mean max 20 cars on the grid every time. That distribution would have to be regulated like when FIFA draws the World Cup groups to avoid having teams from the same continent (except for two from Europe) in the same group. All points would count towards the WCC. Third car drivers would have their own mini championship. It's all doable.

    The factory workers and pitcrew at Force India could be distrubuted at the five teams above because of the increased work load running a third car. That way no one would lose his/her job. Young drivers would get experience in better cars for almost half a season. Just a thought.

  11. #11
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    Quote Originally Posted by 512 TR View Post
    The powers that are will probably save Force India one way or the other but if they fail to do so then how about this idea. It leaves 18 cars on the grid. Let Ferrari, Mercedes, Red Bull, Renault and McLaren enter a third car. If it's too expensive for some teams to do that at every race then let every team enter a third car at 8 races each on 20-race calendar like next year (no Germany). Meaning two teams will have a third car at every race and then the grid will have 20 cars at every race. Liberty was talking about having some sort of a NFL draft type of thing happening. Teams could "draft" the 8 races each for the circuits they wish to enter their third car. For instance, Ferrari picks Monza, Mercedes picks Barcelona, McLaren picks Silverstone etc and so on. Until they've all picked 8 circuits each. But for fairness no race would have more than two teams running a third car which would mean max 20 cars on the grid every time. That distribution would have to be regulated like when FIFA draws the World Cup groups to avoid having teams from the same continent (except for two from Europe) in the same group. All points would count towards the WCC. Third car drivers would have their own mini championship. It's all doable.

    The factory workers and pitcrew at Force India could be distrubuted at the five teams above because of the increased work load running a third car. That way no one would lose his/her job. Young drivers would get experience in better cars for almost half a season. Just a thought.

    The 3 (Mclaren, Williams, & Renault) are vying for Force India's prize money should they fold hence as to why all 3 denied Force India's approval. Williams is next to go under. I give them till the end of the year beginning next year IF Stroll leaves. Claire may step down.

    Yes, I can see the manufacturers entering a 3rd car, including RedBull, to make up for the loss of Force India and Williams with Mclaren to follow....they are mess->the whole F1 organization are in tatters (Mclaren).

    If Mercedes does'nt take Force India or Williams under it's wing as a B-team, then their(MB) stay in F1 will most likely end....Leaving only Ferrari, Renault, RedBull, Alfa, STR.

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    Quote Originally Posted by jgonzalesm6 View Post
    The 3 (Mclaren, Williams, & Renault) are vying for Force India's prize money should they fold hence as to why all 3 denied Force India's approval. Williams is next to go under. I give them till the end of the year beginning next year IF Stroll leaves. Claire may step down.

    Yes, I can see the manufacturers entering a 3rd car, including RedBull, to make up for the loss of Force India and Williams with Mclaren to follow....they are mess->the whole F1 organization are in tatters (Mclaren).

    If Mercedes does'nt take Force India or Williams under it's wing as a B-team, then their(MB) stay in F1 will most likely end....Leaving only Ferrari, Renault, RedBull, Alfa, STR.
    You really think McLaren are struggling with their organization or with money?

    Mercedes might leave F1 after 2020 anyway, with or without having Force India as a B-team. Same for Ferrari leaving.

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    Quote Originally Posted by 512 TR View Post
    You really think McLaren are struggling with their organization or with money?

    Mercedes might leave F1 after 2020 anyway, with or without having Force India as a B-team. Same for Ferrari leaving.
    The F1 organization itself. It needs a major overhaul or a last resort.................bring Ron Dennis back which is highly unlikely at this point or in the future.

    You don't acquire a B-team for a short term investment. That being said, Ferrari is it for the long haul regardless of the formula. Can't say much about Mercedes at this time; if they don't acquire a B-team and don't extend driver contracts beyond the new regulations....its over for them. They are done as well as all the Ham-fosi. I hate this hybrid era of F1.

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    No one is going to leave F1. Force india will be bought by Stroll, if not already and Williams will find another pay driver, maybe not as potent as Stroll but good money nontheless. Williams are struggling with the car concept more than financially this year. McLaren staying is the most certain out of these 3. They offered big money to Ricciardo and Kimi, both turning them down and probably staying with their current team. So financially McLaren is great. They just need the right people in building the car.

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    Quote Originally Posted by jgonzalesm6 View Post
    The F1 organization itself. It needs a major overhaul or a last resort.................bring Ron Dennis back which is highly unlikely at this point or in the future.

    You don't acquire a B-team for a short term investment. That being said, Ferrari is it for the long haul regardless of the formula. Can't say much about Mercedes at this time; if they don't acquire a B-team and don't extend driver contracts beyond the new regulations....its over for them. They are done as well as all the Ham-fosi. I hate this hybrid era of F1.
    Well, long haul or not, if they change the engine formula for 2021 there won't be any B-teams as nobody will know the pecking order of the new PU, so all will just go back to some teams being engine customers for at least one or two seasons. Then maybe some will recommit to a similar situation as today. If there is a Formula 1 to begin with beyond 2020 in the first place.

    I'm pretty sure same thing applies to Ferrari as to Mercedes. Ferrari will not extend any driver contract beyond 2020 as it stands now. Merc has Lewis on a two-year deal starting next year and Bottas on a 1+1. Ferrari? I have no clue.

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    ForceIndiaF1 to exit administration via consortium led by Laurence Stroll more now on @SkySportsNews

    A Lawrence Stroll consortium has saved FORCE INDIA

    Stroll-backed consortium saves Force India https://www.motorsport.com/f1/news/f...ation/3155471/


    Force India management backed by a consortium of investors, led by Lawrence Stroll, have agreed a deal with the joint administrators to secure the future of Force India. All 405 jobs saved. All creditors to be paid in full.


    The 'refloat' process will last "Force India between two and three weeks' to become fully effective.

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    so i guess it's SAFE to say now, that "daddy" saved force india, STROLLER will now go there??? or NO....
    ...the new SF71H looks amazing. Let's hope it's gonna be as FAST as it looks.


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    i dont see why Ocon will be retained instead of Perez who helped save the team and who has been part of the team much longer, ocon to Williams to replace stroll? i wonder where russel will go next year then
    hockenheim 2018 / China 2018 : Never forget how quick Ferrari can lose it all, be humble.
    Positivity doesn't win you championships, whining about people being negative makes you blind!
    lol ignore the bitter old cows ;-)

  19. #19
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    Quote Originally Posted by FerrariF60 View Post
    so i guess it's SAFE to say now, that "daddy" saved force india, STROLLER will now go there??? or NO....
    Pretty much. Whether it's Perez or Ocon, both are going to expose the Stroller's "racing" capabilities. Daddy Stroll does'nt get into deals like this unless there's some fianancial benefit going to him......Mercedes???? He's all business. Williams did'nt work at all for both of them.....daddy and his son.

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