A report revealed Force India only had £240,000 in its account when it was placed in administration.GETTY IMAGES
A report found Racing Point, a consortium led by Canadian billionaire Lawrence Stroll, paid £90M ($117.2M) to take over Force India Formula 1 in August, according to Alan Baldwin of REUTERS. The report also revealed the "parlous finances" of the Vijay Mallya-owned team at the time it was taken into administration. The Silverstone-based team had only £240,000 in its account on July 27, while outstanding gross wages due to be paid at the end of that month totaled £2.2M. The estimated funding requirement for August, including staff salaries, was £9.6M, with "no meaningful income" forecast to be received. Santander froze the company's bank accounts on July 25. Advisory firm FRP said that engine provider Mercedes was owed £13.7M, while representatives of Mexican driver Sergio Pérez were demanding payment of $4.01M. Supplier Formtech was also owed £2.3M (REUTERS, 10/4). In London, Christian Sylt reported administrators of the collapsed Force India team revealed that they "expect to pay all of its creditors in full after its assets were sold" to Stroll. Although the team's purchase price was not initially disclosed, it has "come to light along with details of how badly it had hit the skids." Unlike a winding-up notice, administration gives a "lifeline" as it involves administrators being appointed with the objective of finding a buyer for the company's shares or selling its assets. FRP said that it will receive 2.25% of the proceeds, which comes to £2M ($2.6M). It added that "based on the assumptions made in the estimated outcome statement it is currently estimated that there will be sufficient funds available to pay all creditors in full." If this happens, Mallya and team co-Owner Subrata Roy would be paid from the remaining amount, "though there could still be more twists and turns to come" (INDEPENDENT, 10/3).
