Marussia placed in administration

Published: Monday 27th October 2014 by The News Editor

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Marussia have become the second Formula One team in a matter of days to be placed in administration.

London-based restructuring and recovery firm FRP Advisory has taken on the role of administrator, and confirmed Marussia will miss this weekend’s forthcoming United States Grand Prix in Austin.

A statement from FRP confirmed the company, known as Manor Grand Prix Racing Limited and trading as Marussia F1 Team, “will continue to operate while the joint administrators assess the longer-term viability of the company in its present form”.

Caterham entered administration on Friday and have been given special dispensation to miss the next two grands prix while a buyer is sought for the cash-strapped marque.

Last Monday a company known as Caterham Sports Limited (CSL) also went into administration.

CSL supplies and makes cars for 1MRT, the entity which owns the licence for Caterham to race in F1.

Following a mud-slinging dispute between the past and present owners of Caterham in the days that followed, on Friday it was decided the administrators of CSL, London-based accountancy Smith & Williamson, would be handed full-management responsibility for the team.

Smith & Williamson are now working to find a buyer of “substantial financial means”, with Caterham granted dispensation by F1 supremo Bernie Ecclestone to miss the next two grands prix in Texas and Brazil.

Ecclestone has also granted Marussia the same dispensation, with the Banbury-based marque also able to miss the race at Interlagos should they require.

Acting on behalf of Marussia, one of the joint administrators – Geoff Rowley – said: “Whilst the team has made significant progress during its relatively short period of operation, the highlight of which included securing two constructors’ championship points in the current F1 season, the position remains operating a F1 team requires significant ongoing investment.

“With the existing shareholder unable to provide the required level of funding, the senior management team has worked tirelessly to bring new investment to the team to secure its long term future, but regrettably has been unable to do so within the time available.

“Therefore, they have been left with no alternative but to place the company into administration.

“With the Marussia F1 team now in administration, the joint administrators have assessed that, given the current financial circumstances of the group, it is not viable for the Marussia F1 team to participate in the next race, the 2014 Formula One United States Grand Prix, due to take place this weekend in Austin, Texas.

“The company will continue to operate while the joint administrators assess the longer-term viability of the company in its present form.

“Following Austin, there are two further rounds of the 2014 championship remaining, in Sao Paulo and Abu Dhabi, and the team’s participation in those races will depend on the outcome of the administration process and any related negotiations with interested parties in what is a very limited window of opportunity.

“No redundancies have been made following the company’s entering into administration and all staff have been paid in full to the end of October. The ongoing staff position will however be dependent on whether the company can secure new investment in the limited time available.

“We remain highly focused on engaging with interested parties.”

Like Caterham, Marussia entered F1 at the start of 2010, albeit under the promise from then FIA president Max Mosley of a £40million budget cap.

Following the demise of major manufacturers in Toyota, Honda and BMW at the end of the ‘noughties’ decade as the global credit crisis hit hard, Mosley decided to act.

Although able to lure in three new teams, then known as Manor Grand Prix (now Marussia), Campos Racing (that later became HRT) and Lightspeed (now Caterham), the budget cap was soon withdrawn.

HRT went bust at the end of 2012, and now Caterham and Marussia are poised to follow suit unless new buyers can quickly be found.

F1’s costs over the past four years have soared, notably for the current campaign with the introduction of the 1.6-litre V6 turbo-charged power units.

They have been part of the FIA’s push for a greener, more efficient formula, but in turn it has pushed the smaller marques close to extinction, with Sauber another team struggling financially.

It means for this weekend’s race in Austin there will only be 18 cars on the grid, the smallest field since the 2005 Monaco Grand Prix.

Published: Monday 27th October 2014 by The News Editor

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