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Manor owner holds the keys to team's survival

NEWS STORY
22/06/2015

The future of the Manor Formula One team is in the hands of its owner, Ovo Energy boss Stephen Fitzpatrick, according to a report in the Daily Telegraph by Christian Sylt and colleague Katy Fairman.

The team lies in last place after yesterday's Austrian Grand Prix and its performance off track is no better. Its accounts for the year-ending 31 December 2013 were filed last week months late and reveal that the Sheffield-based team is facing a cash shortfall. Crucially, they also state that Manor is "wholly reliant" on funding from Fitzpatrick. He steered the team out of administration in February through a Company Voluntary Agreement (CVA) and appointed former Sainsbury's chief executive Justin Wilson as its chairman.

"The latest cash flow forecasts, taking account of relevant risks and uncertainties, show that the company will require additional financial support," says Manor Grand Prix director Abdulla Boulsien. "The company is therefore wholly reliant on the financial support of Stephen Fitzpatrick, the ultimate controlling party, to fund any cash shortfall between income and expenditure."

He adds that on 4 June Fitzpatrick sent a letter to the team committing to provide financial support to enable it to continue as a going concern for at least 12 months. It burned up net losses of 4.7m in 2013, down from 57.7m the previous year. Revenue accelerated from 28.3m to 60.8m driven by payments from its sponsors, including Russian sports car manufacturer Marussia, which replaced debt financing in a 134.9m recapitalisation.

It finished the year in 10th place entitling it to an estimated 12.5m prize money in 2014 but this wasn't enough to prevent it from crashing into administration with total debts of 63.6m.

As Pitpass revealed computer company Dell was owed 390,000 whilst tyre manufacturer Pirelli was due 1m and the outstanding bill to British engineering firm McLaren came to 7.1m. Manor's biggest single unsecured creditor was Ferrari which supplied the team's V6 engines and was owed 15.2m. They were all paid just 1.262p in the pound in the CVA.

The team's main source of funding was investment from Russian businessman Andrei Cheglakov who controlled it and Marussia. The team went into administration in October last year when Cheglakov stopped paying the bills and most of its 170 staff were made redundant the following month. Although the team is back on track the pain hasn't let up and only time will tell how long it goes on for.

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READERS COMMENTS

 

1. Posted by Vision, 26/06/2015 5:14

"That Manor has been and appears to remain on such support is not really any surprise. While the returns (income) from participation in the sport remain (so) skewed through the artifice of the Concorde Agreement in favour of 3 teams and the rights holders it will never change.

Other teams are very similar now as in the past. For example, take a look at the 2013 filed accounts of Lotus F1 Team and we learn that it only survived by virtue of a pledge to pay debts as they fell due made by its ultimate controllers under the hand of its directors.

Therefore it is hardly surprising that the industry as a spectator spectacle faces a level of crisis and 'turn-off' for lack of spectacle (i.e. boredom) - it is a genuinely non-level playing field that is deliberately maintained that way.

It is not difficult to see why those with a true passion for the sport in perhaps its purest form seek solace in LMP."

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2. Posted by Will Fly, 23/06/2015 6:31

"Much as I admire Stephen Fitzpatrick's generosity in bailing out Manor, I feel it's time for Renault to buy the team, design their own car for next year and give us another mid tier team. F1 is just too expensive and the prize money just too biased for small independent teams to survive. The engine costs are horrendous and development costs very high if you want to be at all competitive. We need to give more TV time to GP2 so that independent teams can attract more sponsorship and up and coming drivers can get more exposure and attract their own sponsors to help them move into F1."

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