Mazepin's company questions Force India rescue process

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Mazepin's company questions Force India rescue process
Adam Cooper
By: Adam Cooper
Aug 21, 2018, 12:16 PM

A Russian company that was one of the unsuccessful bidders for Force India has questioned the process which led to the team being acquired by a consortium led by Lawrence Stroll.

Chemical firm Uralkali is closely associated with Dmitry Mazepin, father of GP3 racer and Force India test driver Nikita Mazepin.

Mazepin Sr is its deputy chairman of the board of directors, as well as chairman of holding company Uralchem.

In a statement issued on Tuesday, Uralkali said that it "considers that the process conducted by the Administrator may not be in the best interests of Force India creditors and other stakeholders, and the sport in general."

However, the administrators – Geoff Rowley and Jason Baker of FRP Advisory – have responded by saying that all bidders for the team were treated equally.

"All bidders were given equal opportunity to submit the best deal for Force India," they said in a statement. "Throughout, we (the Joint Administrators) have closely followed our statutory duties and objectives as administrators and had the advice of experienced legal counsel."

Uralkali says that it "assembled a team of professionals (including lawyers, accountants, insolvency experts and a Formula 1 specialist) to prepare and submit a competitive bid for Force India, which was led by Uralkali`s independent director Paul J. Ostling."

Although not named, it is understood that the specialist was former McLaren team principal Martin Whitmarsh.

The statement explained in some detail the timeline of Uralkali's bid and its interactions with the administrators.

The company noted that "over the course of the bidding process and discussions with the Administrator, Uralkali insisted on a transparent and fair process to ensure equal opportunities for each bidder.

"In particular, Uralkali proposed that the bidding process be conducted by way of the submission in sealed envelopes of best and final bids to be opened in the presence of appointed representatives of the interested bidders. However, this proposal was rejected by the Administrators."

In essence, Uralkali points out that the timeline for submitting bids was not achievable, especially as consent for any agreement was required from 13 Indian banks because of a freezing injunction on the assets of the original shareholders.

It says: "Upon our discussions with the shareholder representatives, it became apparent to us that the rescue option (at least on the conditions and within the time frames put forward to us by the Administrator and consistent with our own code of integrity) was not achievable due to the complexity of legal structure, the extended period of time required to obtain consents of the 13 Indian banks and to obtain approval of a UK court for an amendment to the freezing injunction.

"Uralkali submitted a restated proposal on August 6, 2018 which, due to the above reasons, no longer offered a rescue option but set out a very attractive proposal to purchase business and assets of Force India on a going concern basis."

The statement concludes: "Following the submission of our proposal, the administrator refused to engage with Uralkali team, did not reply to phone calls and emails and communicated with Uralkali in a single email following close of business on August 7, 2018 that it had entered into an exclusivity arrangement with another bidder regarding a proposal to rescue the company.

"Despite expiration of the deadline set by the Administrator, no rescue plan was submitted to the court for approval, which confirmed Uralkali's view that the rescue option was not achievable in the timeline and under conditions proposed by the Administrator.

"Under these circumstances, it is surprising that no attempt was made by the Administrator to engage with Uralkali with respects to its bid for the assets and business of Force India."

Nikita Mazepin, Force India VJM11

Nikita Mazepin, Force India VJM11

Photo by: Zak Mauger / LAT Images

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About this article

Series Formula 1
Teams Force India
Author Adam Cooper
Article type Breaking news