Force India is reported to have received $118 million (£90 million) in a deal with Racing Point to sell the Formula 1 team. Canadian investor Lawrence Stroll has formed Racing Point company with his investment partners to acquire the Force India Formula 1 team, which was put on sale under the court direction.
Administrators FRP Advisory have documented the transaction details following the legal action initiated by another bidder Uralkali. The Russian company has alleged that Racing Point was given the Force India ownership in spite of their higher bid.
The documents also reveal that Force India had just £240,000 ($312,000) in the company bank account at the time of falling into administration. The amount was insufficient even to pay July salaries, which could only be disbursed following £5m ($6.5m) loan from a team sponsor BWT.
FRP, while accepting there were higher bids, has justified that the Racing Point’s bid because none other of the more than “20 expressions of interest” was willing to rescue the team, which they wanted to acquire for an F1 entry, motor-addict.com has reported.
That eventually didn’t materialise as it became apparent that the necessary agreement from multiple India-based banks wouldn’t arrive in time and the team would have been forced to close.
FRP, therefore, went ahead with Racing Point’s pre-agreed “fall-back” plan with a £90m ($118m) bid for the assets and entry.
Uralkali’s case is based on the fact that bidding process should have been reopened as Racing Point’s attempt to rescue the team remained no more a matter of concern at the time of allocating them the Force India ownership.
That loan was swiftly repaid by Racing Point, which loaned Force India £15m ($19.5m) to allow it to continue racing in 2018.
FRP insists it needed to take quick action to ensure the future of the team was safe: “(FRP) took into account the importance of retaining key staff, the fact that staff were shortly to return from their summer holidays, with the upcoming race in Belgium due to take place a few days after their return [so FRP] took a commercial decision to avoid the risk of a significant loss in the value of the business and assets.”