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GP Week : Issue 217
F1 >>> BUsinEss stake to Marussia, the Russian sports car manufacturer which the team was originally named after, it was still owed £25.4m from a loan it provided. The documents from FRP reveal that in January LDC assigned its debt to Just Racing Limited which is controlled by Vincent Casey, head of corporate finance at Ovo Energy. The debt is secured on all of the team’s assets but their combined value has reduced significantly since it went into administration. In December FRP held an auction at the team’s Oxfordshire factory for nearly 1,000 pieces of its equipment including steering wheels, gearboxes and race suits. The factory itself was sold for £2m, three times less than its book value, to American tycoon Gene Haas who will field a new F1 team in 2016. A second auction was due to take place but according to the documents this changed after the team “received £50,000 from the potential investor In January 2015 to delay the auction and allow a period of time to investigate the possibility of the survival of the Company through a CVA.” The red ink began to accelerate in the year to 31 December 2013 when Marussia made a net loss of £11m on revenue of £61.2m. It didn’t let up last year when its net loss came to £29.2m on revenue of £24.7m over the eight months to 31 August. Its main source of funding was investment from Marussia’s ultimate owner Russian businessman Andrei Cheglakov. It went into administration in October when Mr Cheglakov stopped paying the bills and most of its 170 staff were made redundant the following month. Although the team has emerged from administration its future is still unclear. Missing the first race cost it dearly as F1’s chief executive Bernie Ecclestone recently told the Independent newspaper that not only will its freight to Australia not be free but the team will lose prize money too. “We will deduct the race they miss from the prize money. They will miss one nineteenth of it and they are going to get a bill for the free travel that we gave them. Don’t worry you can imagine they won’t be looked after,” he said. “I think the investor, this energy man, is in it for the prize money.” There were 19 races last year which is why Ecclestone has deducted one nineteenth of the prize money and this comes to £1.9m. It will give a boost to Manor’s rivals as Ecclestone added that “the money it should have got will get distributed amongst the teams that are racing.” They badly need it as several are thought to be at risk of collapse due to annual budgets which have accelerated to £150m on average. By travelling to Australia and passing scrutineering, Manor avoided being thrown out. An investigation by F1’s governing body the Fédération Internationale de l’Automobile (FIA) found that the team had used “all reasonable endeavours” to take part so avoided being penalised. Failing to race in Australia will hit the team’s sponsorship budget and Ecclestone says that the remaining prize money may not be enough to see it through the year. “Whether the prize money is enough to cover their budget depends on what they spend. If they spend 100 million then 50 million won’t be enough.” An even bigger hurdle will come in 2016 when a team run by American tycoon Gene Haas joins the grid. It could spell trouble for one of the backmarkers as only the top ten finishers are eligible for prize money. Ecclestone says that F1’s minnows should start to tighten their belts in case they finish last in 2016. “Next year somebody is going to end up without prize money so maybe they will think they have got to spend less.” In F1 that is easier said than done. 40 GPWEEK.com // 40 GPWEEK.com // PARTNERS: