Hungarian Grand Prix – The Force India team have entered administration.
The Force India team have been put into administration, following a successful High Court action taken against the team by multiple creditors. These are believed to include Mercedes, the team’s engine supplier, as well as their sponsor BWT, along with Sergio Perez. According to Racefans’ journalist Dieter Rencken, Perez has taken action against his team over an unpaid debt of 4 million dollars.
According to a post by Rich Energy, a rumoured potential buyer for the team, they made a last minute cash injection to Force India; the injection has not been enough to stave off administration which they attribute to Mercedes, their engine supplier, as well as driver Sergio Perez, Julian Jakobi & BWT.
Despite a last minute £30m cash injection from @rich_energy the court has today put @ForceIndiaF1 into administration. A tragic and avoidable outcome orchestrated by @MercedesAMGF1 @SChecoPerez , Julian Jakobi and BWT. Disgraceful pic.twitter.com/2E9N9WPmKy
— Rich Energy (@rich_energy) July 27, 2018
The combined debt is believed to be in the region of 40 million GBP. The most likely scenario under this administration order is that the team will be sold as a going concern, rather than liquidated, mainly thanks to the team’s strong performance on track.
Otmar Szafnauer, speaking at the team press conference on Friday, addressed recent rumours of financial crisis at the team, in light of comments made by Sergio Perez on Thursday: “Unfortunately, I don’t know what Checo meant by that, because I haven’t talked to him, but just to answer: there is a high correlation between critical financial situation and the sporting situation.”
“The more money you have in this game, usually the better you do. But hopefully that will be solved soon and we’ll get back to operating in the normal manner that we are used to. We are just in this critical period, which might last a week or two, we have to keep our heads down, do the best we can here, go enjoy, after the test, enjoy our break and then come back fighting thereafter.”
According to BBC’s Andrew Benson, at least three buyers are waiting in line to buy the team, who are in financial difficulties due to the legal troubles surrounding owner Vijay Mallya. The Indian businessman resigned from his position as director at the Force India F1 team in May, in an apparent bid to stave off any legal repercussions for the team.
Recent rumours suggest that one of these potential buyers could be Lawrence Stroll, father of Williams driver Lance.
Breaking story. More to follow.