Midland Group Sells MF1 Racing to Spyker
The Midland Group of Companies wishes to announce the sale of 100% of its shares in Midland F1 Limited to Spyker Cars NV ("Spyker").
Prior to the sale, Midland F1 Limited headed all Midland Group motorsport activities, including ownership and operation of the Midland F1 Racing team ("MF1 Racing"), which competes in the FIA Formula 1 World Championship.
"The decision to sell the team has been one of the most difficult I have ever faced," stated Midland Group Chairman Alex Shnaider. "It is never easy to relinquish something into which one has devoted so much energy and passion. However, as much as I had hoped to witness the continuing growth of the team under our ownership, I truly believe this transaction is in the best interests of everyone involved - Midland Group, Spyker, and the team.
"I am proud to be leaving the team in a much better state than it was when we acquired it 20 months ago. Not only is it more financially stable, it is also more competitive at the track, and getting stronger all the time. The creation of the 2007 car is well underway, as are major upgrades to the wind tunnel facility. Investment into the team's technical development has continued unabated throughout the season.
"At the moment, Formula 1 is a much more mature and understood sport in Holland than it is in Russia. I believe the new owners will be well placed to exploit the commercial and nationalistic aspects of a Dutch identity, and this is something that can only benefit the team.
"My partner, Eduard Shifrin, left the decision entirely up to me, since he knows how important it is for me to see the team not only survive, but succeed. With this in mind, the new owners have demonstrated their ambitious plans to take the team forward to the next phase of its rebuilding programme.
"Spyker, headed by Victor Muller and Michiel Mol, consists of a strong group of investors with the resources, planning and capacity to further develop the team. I am confident that under their leadership, the future of the team rests in good hands, and I would not have agreed to this sale under any other circumstances.
"Midland Group and I have been committed to the team's success from the moment we decided to take it on. We have always been, and will continue to be, Formula 1 fans, and we wish the sport, the team and its new owners the greatest success in the future."
In October 2004, Midland Group`s involvement in Formula One began when Mr. Shnaider confirmed his plans to lodge an entry for the 2006 season.
Although initially committed to the idea of creating a completely new team for the 2006 season, Midland instead signed an opportunistic deal to buy the Jordan Grand Prix team shortly prior to the 2005 Formula 1 season. As a result, the team competed as Jordan Grand Prix in 2005, and re-branded itself as MF1 Racing for 2006.
"The time-line was tight, but by buying Jordan, we benefited from having a ready-made team: the people, the facilities, the know-how - all the elements we were previously looking to piece together from scratch," recalls Mr. Shnaider. "Entering the sport a year ahead of schedule was easier to execute with an established team, although it still presented us with a steep learning curve in 2005. But that's OK; we learned a lot during the transition."
At the time of its acquisition by Midland, there were few tangible assets in place to ensure the participation of the Jordan team in the 2005 F1 World Championship, which commenced in March 2005 in Melbourne - barely two months after the purchase was completed.
Therefore, the first goal was to ensure that Jordan would participate in Melbourne with three cars, complying with the 2005 FIA regulations. Within a very short timeframe, MF1 Racing managed to fulfill the provisions of Jordan's prior agreement with Toyota, thus enabling receipt of engines. The team also undertook the task of modifying the chassis to accommodate the Toyota V10 in place of the previous Cosworth powerplant; designing a new gearbox to mate with the new engine; acquiring sponsorships and signing new drivers. In less than two months, the first goal - participating with three cars in accordance with the 2005 FIA regulations - had been achieved.
The next goal was to establish the reliability of the race cars while improving the team's cost efficiency. Existing supplier relationships were examined and replaced where appropriate and where a satisfactory cost/quality correlation would be ensured. In addition, more work was brought in-house at MF1 Racing to enhance flexibility and cost efficiency. As can be evidenced by both cars' combined race finish ratio of 84% in 2005 and progress to date in 2006, the team's mechanical reliability and consistency of performance has been successfully established.
Phase 3 was the evolution of the 2005 car, the EJ15, and increasing its competitiveness. The EJ15B aerodynamic package, which debuted at the 2005 French Grand Prix, introduced a number of performance gains. More importantly, these concepts set the stage for the development and construction of the 2006 car, the M16, and allowed the team to significantly reduce the gap to its rivals. The team is now, on average, some 2 seconds per lap closer to the front of the grid than it was a year ago.
Off the track, the team's facilities and equipment have been completely refurbished. The paddock hospitality centre has been redesigned and three state-of-the-art technical trailers have replaced the aging fleet of transporters. Investment has also been made in improving the team's factory and wind tunnel facilities, which are in the process of being upgraded in scale from 40% to 50%.
"Our plans for the team were right on target. 2005 was tough, as expected, but we relished the challenge and got on with the job," says Mr. Shnaider. "In 2006, our plans had begun to yield improved results. The team is now a whisker away from the middle of the pack - and getting closer at every race - and its reliability is better than that of a few teams higher up the grid. At the factory, everything has been reorganized and the team is poised to break through to the next level. Spyker recognizes that, and we have recognized in Spyker the ability to attract sponsorship from a robust and enthusiastic F1 market. We feel that these sponsor dollars, with an owner's investment similar to ours, will bring the results quicker than it would have under our plan."
"I have experienced the highs and lows of being a team owner, and for the most part, I've enjoyed it immensely. But I do have a number of other business interests apart from F1, which are much more significant in monetary terms, even if they are not as high in profile. I generally found time to attend only 5 or 6 race weekends in each of 2005 and 2006, and hopefully I will be able to keep it at that level. Michiel Mol has invited me to come and visit the team whenever I like, and I am looking forward to watching the action and relaxing with my guests in the paddock. "
"I would further like to thank everyone who helped us achieve so much in this challenging environment in such a short time: our drivers, mechanics, engineers, designers, factory staff and team management, as well as our suppliers and sponsors. They have all done a wonderful job, and their future in this sport is deservedly bright."