Boss and co-owner Vijay Mallya’s financial problems do not affect Force India, deputy team principal Bob Fernley insists.
This week, it emerged that lenders to Mallya’s failing airline Kingfisher are set to sell the billionaire’s collateral assets as they recall the loans.
And the very latest reports are that Force India’s title sponsor Subrata Roy, of the Indian giant Sahara, has had 100 of his and the conglomerate’s bank accounts frozen by the Securities and Exchange Board of India over failing to repay investors.
Referring on Thursday to team supremo Mallya’s troubles, Force India’s Bob Fernley said: “There is a disconnect between what happens in Vijay’s business and what Vijay is doing on the F1 team.
“Whether Kingfisher or United Spirits is doing well or not doesn’t affect the team, and it’s very difficult for us to get that message across, although we have been trying for several years,” he is quoted by the Guardian newspaper.
Force India boss Vijay Mallya’s grounded airline Kingfisher appears close to folding.
Respected business newspapers, including the Wall Street Journal, said plans by Kingfisher’s lenders to recall loans is “likely to cause severe financial strain” across Mallya’s entire portfolio.
“Fifteen days earlier, I would have given a confident answer. Today I have none,” an unnamed ‘senior Kingfisher executive’ is quoted as saying.
An aviation official told the Times of India newspaper: “It is almost the end of the road for Kingfisher.”
The Business Standard said among collateral available to lenders are assets like helicopters, while Mallya’s villa in Goa, India, is being sold.
The Financial Times said another of Mallya’s houses near Mumbai has already been collateralised.
Representing Kingfisher’s lenders, the State Bank of India’s deputy managing director Shyamal Acharya told The Hindu: “We gave them enough time. They are not saying anything new or credible.”
Vijay Mallya is pumping an extra $80 million into his F1 team. The news comes amid the well-documented financial struggles of his other business, the Indian airline Kingfisher.
Mallya said this week: “We had a board meeting in India after the Abu Dhabi grand prix and the board has approved a $80 million capital investment programme for the team.
“We are going to invest heavily in new technology and give more tools to our design team to try and move further up the grid.”
Because of the Kingfisher crisis, it had been rumoured that Force India might also find itself in financial trouble.
But Mallya told F1’s official website: “As far as Force India is concerned, we are alright.
“In fact both (co-owner) Sahara Sri Subrata Roy and myself went to see Bernie Ecclestone in Delhi during the grand prix and showed him that Force India was stable and financially safe.”
The next item on Mallya’s agenda is a 2013 teammate for Paul di Resta, with Nico Hulkenberg set to switch to Sauber after this weekend’s Interlagos finale.
“We are thinking about it, but we are in no immediate hurry because there does not seem to be the kind of quality we need to replace Nico available, either in the current grid or in GP2,” he said.
Mallya suggested Adrian Sutil, Force India’s long-time driver until 2011, is the leading candidate.
“Adrian was always a very quick driver — yes, he was out of formula one for one year, but I don’t think that this would be a major handicap,” he said.
Vijay Mallya on Monday suggested former Force India driver Adrian Sutil is a possible contender to replace Nico Hulkenberg in 2013.
But Mallya, the Silverstone based team’s co-owner and boss, said he is not certain German Hulkenberg is switching to Sauber.
“I hear from the media that Nico has signed with Sauber,” he is quoted by the Indian Express. “He hasn’t sat down with me and told me that,” added Mallya.
But if Hulkenberg does go, Mallya is confident he will not be difficult to replace.
“Yes absolutely, why not? Never forget I always have the potential of considering Sutil again. Sutil is always quick. So there are many options,” he said.
Sutil was a long-time Force India driver until last season, when he was embroiled in the Chinese nightclub assault saga and thereafter lost his seat.
Vijay Mallya was not in a good mood when he was swamped by Indian media at his home grand prix.
The Indian billionaire had been branded an “absconder” by some of his countrymen as he holed up in London amid his ailing airline Kingfisher’s crisis. But he arrived at the Buddh circuit near New Delhi on Saturday, and immediately had to face a barrage of questions including whether his private Airbus had been “seized” by unpaid airline authorities.
“You believe that Indian papers have any credibility?” the Force India boss snapped. “Wonderful,” he scowled. “I don’t owe anybody money. Why should my plane be at risk? It’s so stupid.”
He also faced the accusation that he had finally stumped up the courage to appear at his F1 team’s home race, despite the obvious hostility he was facing.
“Why should there be even one iota of doubt that I wouldn’t be here?” said Mallya. “If I am not at my home grand prix, why should I be anywhere else?”
Vijay Mallya, the owner and boss of the Force India team, had good and bad news on Thursday.
The good news was that embarrassing protests planned for the Indian grand prix by grounded and unpaid staff of his ailing Kingfisher airline have been called off. That’s because he struck a salary deal with the disgruntled workers.
“There will (now) be no protests during F1,” an airline engineer told the Times of India.
But there was also bad news. One piece is that there is a risk his private Airbus plane will be impounded if he lands it on Friday, due to unpaid bills to India’s airline authorities. Force India’s deputy boss Bob Fernley, however, insisted Mallya is still planning to attend the grand prix.
“He won’t be at the circuit tomorrow (Friday) but he’ll arrive Saturday,” he is quoted by PA news agency.
Forbes, meanwhile, has decided that Mallya is no longer a billionaire.
“Thanks to the Almighty that Forbes has removed me from the so-called billionaires list,” he wrote on Twitter. “(It will mean) less jealousy, less frenzy and (less) wrongful attacks.”
F1 chief executive Bernie Ecclestone said he is sure Mallya’s apparently declining wealth is not a threat to Force India.
“I’ve known Vijay for 30-odd years and in his business life he’s always had ups and downs,” he is quoted by the Telegraph. “I don’t think Vijay’s problem will affect the team.”
No longer facing arrest over bounced cheques, Force India chief Vijay Mallya could still endure a trying race weekend in his native India.
The Hindustan Times newspaper reports that unpaid and grounded staff of the billionaire’s beleaguered Kingfisher airline intend to confront Mallya at the Buddh circuit this weekend.
“We have planned to stage a dharna (sit-in protest) when Mr Vijay Mallya comes at the grand prix,” an unnamed Kingfisher engineer said. “A protest at the sporting event will highlight our plight to the entire world.”
An air hostess added: “What is the option left before us but to protest? All of us are in deep financial crisis, but (Mallya) is unperturbed. (He is,) in fact, mocking at our misery with (his) lifestyle.”
Indian aviation regulator DGCA has suspended the licence of Vijay Mallya’s carrier, Kingfisher Airlines.
The license has been suspended because the management has failed to present a credible revival plan and will remain in place until the carrier can present a convincing financial plan for its future.
The airline is currently $1.4 billion in debt and has never turned a profit since it commenced operations in 2005.
The arrest warrant against Force India boss Vijay Mallya has been withdrawn.
With the sport now set to travel to the billionaire’s native country for the Indian grand prix, it emerged last weekend that Mallya faced arrest there after cheques issued by his ailing airline Kingfisher bounced. But reports on Thursday said Hyderabad International Airport withdrew the case because Kingfisher agreed to pay the debt.
Indian reports said the case involved a sum of about $2 million.
“The case has been withdrawn,” a lawyer for the airport is quoted by the Press Trust of India as saying.
Bob Fernley has played down his boss Vijay Mallya’s latest problems.
Already grappling with his ailing airline Kingfisher, Force India chief Mallya now faces arrest in his native India, two weeks ahead of the team’s all-important home race in the country. The non-bailable arrest warrant was issued by a Hyderabad court last week over bounced cheques relating to the cash-strapped and grounded Kingfisher. But deputy team boss Fernley has played down his boss’s problems.
“It will be resolved and I expect Vijay to be in India,” he is quoted by the south Asian nwes agency ANI. “It’s not a big amount of money so he would have no idea a cheque would have been issued. For me, there are no issues with the team. It is just one thing that has gone wrong and I have to deal with it,” he added.