Not much has been released about the structure of the new Racing Point Force India team so far but some documents has surfaced revealing few information.
The Sahara Force India Formula 1 Team ceased operations during the Hungarian Grand Prix as the new Racing Point Force India team was born with the FIA having worked with the administrators FRP Advisory, allowing for the mid-season entry.
The seven-member consortium led by Lawrence Stroll stepped in to buy the team as a going concern. The sale was to take place on the buyout of shares depending on the approval from the 13 Indian banks.
However, the the consent couldn’t be reached upon on the deadline date of August 14 and following that the asset transaction deal was put in place on a pre-agreed amount of £90m with Racing Point – one of the reasons why Uralkali questioned FRP’s decision.
Racing Point was one of the five bidders and the only one to have submitted a rescue proposal under going concern formula and so it was easy for FRP to choose even though Uralkali claim that their bidding amount was higher than Racing Point.
So far, not much details has been released from the team’s side upon its structure apart from Otmar Szafnauer being named as the new team principal. However, certain documents under the UK Companies House reveal some details of the parent company.
It has Stroll and his longtime business associate Silas Kei Fong Chou in a commanding position as the two directors of ‘Racing Point UK Holdings Limited’. Both have significant control, holding at least 75 percent shares in the company.
The document for both states: “The person has the right to exercise, or actually exercises, significant influence or control over the activities of the trust, and the trustees of that trust (in their capacity as such) hold, directly or indirectly, 75 percent or more of the shares in the company.
“The person has the right to exercise, or actually exercises, significant influence or control over the activities of the trust, and the trustees of that trust (in their capacity as such) hold, directly or indirectly, 75 percent or more of the voting rights in the company.
“The person has the right to exercise, or actually exercises, significant influence or control over the activities of the trust, and the trustees of that trust (in their capacity as such) have the right to appoint or remove, directly or indirectly, a majority of the board of directors of the company.”
In addition, the only other co-owner’s detail mentioned is of Monaco Sports and Management’s Jonathan Andrew Dudman, who holds more than 50 percent of the shares but less than 75 percent.
His document states: “The person holds, directly or indirectly, more than 50 percent but less than 75 percent of the shares in the company.
“The person holds, directly or indirectly, more than 50 percent but less than 75 percent of the voting rights in the company.
“The person has the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company.”
It remains to be seen what role the other co-owners, Canadian entrepreneur Andre Desmarais, fashion business leader John Idol, telecommunications investor John McCaw Jr, financial expert Michael de Picciotto have within the company.
The administrators revealed further details on the sale process. The issues started to surface in 2017 itself and aggravated in 2018. To keep on with the cash flow, its principal sponsor BWT provided two separate loans at the start of the year.
It amounted to 757,000 euros and 535,000 pounds. In addition, BWT also gave another loan of £5m during the time of administration to keep the the cash flow in check as the team only had £240,000 in its bank account.
BWT were paid back in full when Racing Point bought the assets and issued £15m loan which also covered the wages for August. The administrators also released the list of creditors to which the team owes money at the time of administration.
It includes various suppliers, circuits, hotels, rents, etc along with Mercedes, BWT, Brockstone Ltd and Formtech. In addition, there are legal claims of £10m and £8m over commissions for sponsorship, while £5m for cancelled sponsorship.
Another £3m claim is pending which relates to the introduction to a potential buyer. The claim raised by former co-owner Vijay Mallya of being owed £159m was found to be not true as the administrators assessed that he and Sahara owes the company £4.2m.
It is expected that the creditors will be paid in full in the due course of time with additional cash being injected in Force India as the internal budgeting process goes on with Szafnauer confirming of an increased budget in 2019.
We await for more details on the team’s structure on the whole once the process of sale is completed in full. It could be one of the reasons for the delay in the announcement of its drivers for 2019 whether Lance Stroll or Sergio Perez.
Following the confirmation over the Hungarian GP weekend that it will be allowed to get the prize money it earned by finishing fourth twice in 2016 and 2017 seasons, the situation has changed since Haas is yet to sign the agreement to pass it.
