Force India has been one of the success stories of Formula 1 over the past decade.
During the period when Jordan became Spyker became Midland, its championship finishes read: ninth, ninth, ninth, 10th, 10th.
Then came Vijay Mallya and the team’s rebranding as Force India, and the first two years again yielded a 10th and a ninth. But the second of those two results came under new regulations in 2009, and marked the start of a climb up the field.
Only once has Force India failed to at least match its previous year’s performance in its entire history, slipping from sixth in 2011 to seventh a year later despite scoring an extra 40 points.
It’s a remarkable achievement for a team of that size. Force India has been consistently maximizing its potential as defined by its budget, and the results have been mightily impressive. That it has still been competitive in a midfield featuring Renault, McLaren and an extremely strong Haas this season, all while facing increasingly difficult financial circumstances, is outstanding.
But this past week brought a dramatic intervention that appears to threaten the team’s very existence. The name Force India Formula One Team Ltd appeared on the Companies Court Winding Up List last Wednesday, and by Friday night the team was in administration.
And yet this week Latifi was racking up the miles in the VJM11 at the Hungaroring as the race and test team went about business as usual.
It’s a bizarre situation that is worrying for all involved – ‘administration’ is not a word anybody wants to hear regarding their employer – but there appears to be light at the end of ta tunnel that Force India effectively put itself in.
Team owner Vijay Mallya has been facing extradition to India on fraud charges, with his ongoing financial concerns leaving a cloud over the team. Fresh investment has been mooted for a while, but the claims from UK-based drinks firm Rich Energy about an imminent takeover earlier this year were always taken with a pinch of salt.
According to its latest accounts, Rich Energy has total current assets of just £1million ($1.3m), which doesn’t suggest it has the capital to purchase and run a Formula 1 team. Last Friday the company claimed that “despite a last minute £30m cash injection from Rich Energy the court has today put Force India into administration. A tragic and avoidable outcome orchestrated by Mercedes AMG F1, Sergio Perez, Julian Jakobi and BWT. Disgraceful.”
That comment was tweeted, accompanied by a photo of the front page of what appeared to be a sponsorship agreement between Force India and Rich Energy dated 27 July 2018. A sponsorship agreements go, £30m ($39.4m) would be a major commitment. For comparison, the Martini title partnership deal with Williams is reported to be worth around the $15m-per-year mark.
It appears that many within Force India did not see a positive end in sight with the team in its current guise; a one-off injection merely delaying the inevitable further struggles down the road. So Sergio Perez triggered legal action that put the team in administration. And that’s what’s unusual about this situation.
A current driver putting his own team into administration sounds like suicide. But Perez insists it was the best move for the team’s long-term health.
“The thing is, there was a winding up petition from another customer, which would have closed down the team completely,” Perez explained. “Therefore I was asked to save the team, to pull the trigger and put the team into administration. It was nothing to do with my outstanding amounts. The only reason I have done it was to save the team and for the better future for the team.
“It was not only me. The reason behind that was not to screw up the team. It was to save the team. It’s much more complicated. I don’t really understand all the terms with lawyers and so on, but certainly, the bottom line of this is we either do this or the team will have gone bust. It’s what I got from the lawyers and from members of the team.”
The joint administrators are FRP Advisory, who have experience of working with F1 teams, having dealt with Manor when it went into administration ahead of the 2017 season. FRP Advisory say the aim “is for business as usual” while options are assessed, and the team is certainly continuing in that vein.
On Tuesday in Budapest, Force India was one of two teams – Williams being the other – running a 2019-specification front wing as part of next year’s car development. The change is a significant one in terms of aerodynamic impact on the rest of the car, and so the data gathered at the Hungaroring will help shape the new design.
An image I posted of the Force India on track drew a Twitter response saying they thought the team “would be gone” after last weekend’s race, having gone into administration. Not so, with the team carrying out a full testing program, and the drivers being used hinting at the confidence with which it is looking to the future.
Latifi has become more closely involved with the team this season. The Canadian’s father is a 10 percent shareholder in the McLaren Group after buying a stake worth $270m, showing there is serious financial clout behind the name and an interest to invest it within F1.
While it seems Latifi’s money is already tied up at McLaren, there’s even more cash behind Nikita Mazepin, who took over the cockpit on Wednesday. The young Russian’s father Dmitry is worth an estimated $7bn as chairman of Uralchem.
A third driver’s father has also been linked with investment at Force India, with Lawrence Stroll potentially looking at moving across from Williams after an underwhelming year for the team so far. And they are just the more obvious names being leaked.
Mercedes is watching on as a creditor that was involved in the administration proceedings, and Toto Wolff spoke confidently about Force India’s future last weekend.
“I think, first of all, credit must be given to Vijay for 10 years or so of funding the team and having been not only a shareholder, the key shareholder of the team, but also having had the enthusiasm to support the team and fund it,” Wolff said. “Obviously things have turned more difficult for him in the past, and that has had an affect on the team Force India.
“Now that process has been kicked off by an administrator, there are many potential buyers with a great interest, with deep pockets, with an understanding of what kind of spending levels are needed in order to perform in Formula 1.
“It’s something that is positive for the team, and for all its employees I would say. As much as we have to recognize Vijay’s effort the last 10 years into the team, we shouldn’t forget that.”
Administrators will now work out which is the best future path for Force India, but unlike recent cases of teams entering administration, there are numerous parties with both the desire and the means to get involved.
With the team sitting sixth in the constructors’ championship – 23 points adrift of fourth-placed Renault – the Force India success story might not be over yet.