Forbes has ran a sobering report on the state of Marussia’s debt and just how far it could be from actually getting back to the Formula 1 grid in 2015 if key investors and the current administration process doesn’t restructure the team in an efficient and long-term manor.
According to Forbes, Marussia’s administrator’s, FRP Advisory, release a detailed report showing Marussia’s financial position and the assets that were seized as restitution for unpaid bills. Creditors claimed these assets and demanded payment before turning these assets over.
“duress payments were made to third party creditors who had taken possession of MGPR’s assets due to non-payment of their invoices.”
How much did Marussia owe? The Forbes report says:
“At the top of the tree is Ferrari, which is owed $25.4 million for supplying its 1.6-liter V6 turbo engines. Next up is $10.9 million due to rival McLaren for providing wind-tunnel and simulator services. The team even owes money to F1’s governing body the Fédération Internationale de l’Automobile (FIA) and its unpaid bill to Britain’s tax authority alone comes to a cool $1.6 million.
In fact, MGPR owes money to more than 200 companies and they are all listed in FRP’s report. It reveals that in the eight months to the end of August last year MGPR made a $48.4 million (£29.2 million) net loss on revenue of $41 million (£24.7 million) with total net liabilities coming to $68.9 million (£41.5 million)”.
Another interesting point from the article is a peek into how the prize money is paid out and how much. It’s been one of the remaining carrots for Marrusia to field their car in 2015 and claim their 9th place winnings from 2014 in the neighborhood of $50 million. However, as you’ll see in the article, the Team Agreements with formula One Management have stipulations regarding insolvency and according to the agreement, they would have ran afoul of that back in late 2014.
Administration or bankruptcy here in the US, is a restructuring program that is intended to get the organization back on the right path but last week FRP said that Marussia was emerging from administration that seemingly meant that investors might have been found.
Most likely an asset acquisition as it would take tens of millions to reduce past debt and move the team forward. While the emotional pull is to see the team back on the grid, the reality is that many financial hoops will have to be leapt through in order to get the group heading to Australia in a month’s time.
Hat Tip: Forbes. It’s an interesting read so go check it out.