Vijay Mallya, Force India, Spa-Francorchamps, 2012

Mallya says ??50m investment planned for Force India

2012 F1 season

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Vijay Mallya, Force India, Spa-Francorchamps, 2012Force India will benefit from a new investment programme according to owner Vijay Mallya.

“We had a board meeting in India after the Abu Dhabi Grand Prix and the board has approved a ??50 million capital investment programme for the team,” said Mallya.

“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.”

Mallya has been the focus of considerable attention due to financial problems elsewhere in his business empire this year. But as far as his F1 team is concerned he believes that “given the tools that we have, which are mostly of the Jordan era, we have done exceptionally well”.

“Looking back at the season so far, we have every reason to feel proud. We?ve scored more points than in any previous season and every year we?ve demonstrated that we?ve gone up the ladder. And we?ve taken fairly significant steps, not just baby steps.”

Paul di Resta also drew positives from the season so far: “I think as a whole it has been a good year.”

“For me the stand-out races are Bahrain and Singapore ?ǣ races where everything came together. The second half of the season has been more mixed. When you look at the results on paper, it certainly doesn?t tell the whole story.

“For various reasons some good results slipped away from us and we?ve had issues that held us back while we tried to understand them. The last race in Austin was looking very positive to begin with, but after my pit stop I just could not get the tyres to work, so I?m hoping that the conditions in Brazil will suit me better.”

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Image ?? Sahara Force India F1 Team

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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34 comments on “Mallya says ??50m investment planned for Force India”

  1. Quite a bold statement coming from someone with less than no money

    1. Actually, Mallya himself is still very well off. Sure, Kingfisher airlines may be bankrupt, but his wide-reaching liquor empire is still raking in enough profits to keep him afloat. That being said, where is this capital going to come from – the Mallya end of the operation, or Sahara?

      1. That liquor empire has been partially sold to Diageo and Mallya has only 15% stake left in United Spirits.

        If you ask me, this is a smokescreen. When Kingfisher airlines first started going off rails, Mallya made such misleading comments too. “Our planes have been hit by bird-strikes”. “The cancellations are because of planes being re-configured to increase business class seats which will generate more profits in the long term”.

        I have a very strong feeling that Interlagos 2012 will be the last race of the team under the name “Sahara Force India”. it will be something new next year, I hope.

        1. Why would you hope they change Force India be another team next year? they will be here with the same name!!

          Mr mallya has been excellant since he brought the team, we have improved alot and are back to the same level as the jordan days. Hopefully we will carry on improving. hopefully Sutil will return and then force india be ready for the next chapter of thier lives.

          1. A lot of use of the word ‘we’ here. Are you an employee?

          2. No I wish!!! but have supported the team since the jordan days!!!

          3. Are you an employee?

            No I wish!!!

            Perhaps he’s Sutil himself? :D

        2. Who knows, it might even be Mallya investing the money here to have one worhtfull asset his debtors cannot touch. Or maybe even to leave something of a legacy if all else fails!

          Given the hundreds of millions Sahara has to pay back to investors it conned, its unlikely that most or all of this has come from them!

          1. Sahara didn’t “con” anyone. They simply skipped a few steps in a housing investment and the bureaucracy in India caught them with their mouths full. They have to “return” the money they collected to investors. So, I don’t think they are actually losing anything here. Other than maybe their name..

          2. @rojov123 you can call it as you like, but exactly that argument was used by a couple of people who took off with a billion in Czech crowns in the 1990’s here (look up H-systems).
            And the poor people who lost their savings in it defenitely felt conned, and the courts agree. These steps are there not just so the bureaucrats can take their slice of the boon.
            And the fact they have to give back over 600 million means finding that much cash to actually hand back, something that is not all that easy in the current economic climate.

        3. @sumedhvidwans come on yaar. Yes, he sold stake to Diageo. But, it was initially <20% that was sold to Diageo. It turned into ~52% due to SEBI regulations regarding shares. This guy still has money. SFI will remain in F1 next year and beyond. It is unfair to say Mallya is a bad bizman. Every person goes through ups and downs. After all KF Airlines is his first biz failure

          1. Businessman? Mallya? What did he achieve except for inheriting the business from his father and now having to sell off, because of his ego?

  2. He should consider paying some of his pilots ( I meant the people who fly his planes :P ) rather than investing more money considering that government banks are giving loans ( taxpayer’s money ) in the tune of hundreds of millions to him to keep his business afloat . Instead he goes about in his Maybach and investing in f1 . Its **** India not Force India . I hope PDR can go to a better team in 2014

    1. I suppose he sat you down and discussed his finances with you. Maybe even gave you a run down of how he sourced the investment by witholding employee salaries. Agreed he hasn’t paid his employess in his Airline business, but there has never been any indication that he has been using money from KFA for SFI. In fact he still has a cricket team he owns and funny that I don’t see people arguing that he should sell it off and raise money for KFA.

      1. He doesn’t need to talk about his finances. But that doesn’t mean people don’t know .No , he need not raise any money for KFA . Just pay people their money and shut it down if you can’t sustain . At least it won’t impact his lifestyle or his f1 team if he is really passionate about it . A cricket team ( IPL ) is peanuts compared to F1 . Let him continue to have his ” Indian ” team for however longer possible . SFI is no “ferrari “and the indian people are not the tifosi .

        1. Whether or not he chooses to shut down KFA or keep it going is no ones problem except his and his company’s. It does not look like it has impacted his lifestyle or his F1 team. The reports of financial problems broke out in April. The team is still scoring points and still doing well. A cricket team may be “peanuts” but it is what the Indian public associates with him far more readily than SFI. Also in case you did not note, it IS Sahara Force India and not just FI. Sahara has a stake in it and thus they as a board have every right to put money into it.

          Regarding SFI not being Ferrari and the Indian public not being the tifosi. Ferrari did not just appear and become the best in the world. The tifosi as a fan base has taken years to develop. Which other team has a fan base as dedicated to their team than Ferrari?

          You think SFI will languish in the mid field for ever, yet look at Red Bull. One good designer has a long established team like Ferrari praying for Alonso to win. Williams had their worst season last year and this year they had a win. The fact is the VJM bought the Spyker team when it was at the bottom of the field and turned it around to make it a mid-field team. I don’t care they haven’t scored their first win, but at least they’re there and trying. 2 years ago India did not have an F1 circuit, now it does. I know how India becomes when it senses the team is doing well in a particular sport. The Olympics this year had people trying to understand the rules of Archery because people were competing. Given time I think the Indian fan base for F1 can become the largest in the world.

          1. “A cricket team may be “peanuts” but it is what the Indian public associates with him far more readily than SFI. ”

            – That has nothing to do with his investment in F1 . What I was trying to say was that owning an IPL team is far easier than owning an F1 team in terms of finances

            ” I know how India becomes when it senses the team is doing well in a particular sport. The Olympics this year had people trying to understand the rules of Archery because people were competing. ”

            – This is true mate , however Indian people need to compete first . This team does not have Indian technology or Indian engineers or most importantly Indian drivers . It only has Indian money ( I meant the investor’s money) . I know you will be saying money is most important in f1 . Right you are but its not everything . It may be great for a mallya fan to know that he is at the helm of an F1 team . But that does nothing to make me proud when compared to an Indian driver who is in f1 competing . Again its always the athletes that are remembered more than teams .
            To put it in perspective in terms of cricket ” I don’t care a damn if Chris Gayle
            hits a century in IPL for some club . But I feel so glad if an Indian does so against England in England “.

            Most of the support for ferrari have come from their involvement in automotive sector . A 7 year old knows ferrari not because of f1 but because
            of their sports cars . Tomorrow if any automotive company starts an f1 team from India , then it something to be proud of because it is Indian technology.

            ” You think SFI will languish in the mid field for ever, yet look at Red Bull. One good designer has a long established team like Ferrari praying for Alonso to win. ”

            -Let us see what happens in 5 years time . My opinion : they can’t do a ” red bull ” .

            ” Given time I think the Indian fan base for F1 can become the largest in the world.”

            – couldn’t agree more . India will soon establish itself a good fan base for F1 . At least that’s what I would want as an Indian

  3. Force India will no longer exist after 2013, that’s what this confirms. Someone who has less than nothing is suddenly coughing up 50 million quid? It just doesn’t add up.

    1. I don’t understand why people say he doesn’t have any money. Other than the airlines, all his other business ventures are doing well. Also, the airlines is a limited company. What this means is that he nor his other companies WILL NOT go bankrupt even if the airlines fail and shut down completely tomorrow.
      Sahara, the other shareholder is a conglomerate with a yearly revenue around 1 billion. Hell, they sponsor the a cricket team which costs more than Force India and Williams put together. Pretty sure he can cough up 50 mill over 2 years or so.
      In any event, the guy is rich. he will always be rich and there is no use being mad with jealousy. Get over it..

  4. Time will tell, results so far for SFI are trending up… from points scored perspective.

  5. The Diageo deal will take some time to complete due to the Indian rules on a takeover – part of the deal includes an increase in the number of shares issued of 10% so this money does not go to Mallya.

    Forbes downgraded him to an $800 millionaire last month and some anlaysts believe it is even less than that, so $50m would be at least 6.25% of his entire personal wealth, much of which is tied up in non-liquid assets. A lot of cash even for Vijay to find

  6. I would like to see the Force India name stay on the grid, it’s a nice brand they have built up, and I like the designs they use in the livery with the white, orange and green. More money for the team next year can only be a good thing.

  7. I don’t understand why people have so much fuss around the business’s of Mr. Mallya ? It’s understandable that his KFA is not flying and it has huge debt to clear both to the banks and the employees but owning an airline business is just as hard in India. There are many reasons that contribute to the failure of the KFA biz, but neither Mr. Mallya or the KFA shareholders are walking out from its ailing biz. C’mmon its not a bread or pasta making company? Given the hard times and the scenarios in India almost every airline companies are running in debt. Even after clearing 49% FDI input,the aviation industry in India hasn’t seen any investment yet. Anyways his other biz are reasonably doing well. The Diageo deal is one of the biggest in the history of India. He has dared to build a team with an Indian identity and people should at least praise that. He has passion for F1,Cricket and Football and thats why he invests in them and it has got nothing with his failed KFA biz or for that matter with any other biz and also as hey says he is not answerable. India is proud to have an Indian F1 team,an Indian F1 circuit and an India F1 driver and the investment will prove good to the SFI as a team. Yes the SFI is not the Ferrari nor the McLaren or the Williams but it is a true racing team and the paddock values this team its people,drivers and Mr. Mallya has done an awful lot to bring this team from the Spykar/Midland era to where it is now and hopefully in next few years it will establish itself with the likes of the Lotus,the Mercedes or the Red Bull’s.

    1. I am happy with the way he brought the team to its present condition . But ” Indian team ” ? there is nothing Indian about it except for its investors . Even if he does establish a legacy it will take a long time . I will be cheering though for any Indian driver no matter what team he is in . Now he says there are no good Indian drivers for his side . Will he give a drive for a good Indian driver in the future or will be completely commercial ? Don’t mistake me . I am not trying to say that NK or KC should be considered instead of PDR or HUL . But what is the point if he merely develops his team instead of developing budding Indian drivers . Yes, we should be proud of the Indian GP , proud of any Indian drivers , proud of motorsport interest in India but Force India ? I think Not .

  8. In the words of journo Stuart Codling, “The sensible journo, faced with a press release in which a man with no ££ claims to be spending £50m on his windtunnel, laughs & hits delete.”

    Enough said. :)

    1. @journeyer I don’t agree that when a person whose businesses employ several thousand people, whose financial problems are well-documented (and have been referred to here many times in the past), says he is going to spend £50 million on his racing team, that isn’t newsworthy.

      The context of his financial situation is relevant here and I have referred to it. I do believe this particular story should be treated with a healthy scepticism. But I don’t agree with you that the “sensible” reaction is to ignore it.

      1. @keithcollantine Mallya says he will spend 50 million. Which is… pretty much what every other F1 team is doing, no? What makes his more newsworthy than what the other teams are doing? It’s one thing if there’s a new investor coming into the team, but nothing of the sort was mentioned here. If we’re just talking about actual cash, did we really learn anything new?

        1. @journeyer

          Which is… pretty much what every other F1 team is doing, no?

          I’m sure in the case of some it will be a lot more, in the case of others it will be less. But as I say it’s the context of Mallya’s financial situation which makes his situation interesting. There have been reports of his staff going months without being paid and yet he’s pumping money into his F1 team. That and the fact that he’s keen to draw attention to it is one reason why it’s newsworthy.

          I also thought the quote about the team still having Jordan-era equipment was quite revealing. Not merely from the point of view of Mallya saying they’re going to replace it, but the fact they’re still using some kit which must be at least seven years old.

          1. In J. Sawards post about the subject today he wrote that:

            The Indian newspapers are reporting today that Kingfisher Airlines has just paid its employees for the month of May, which means there are still salaries to be paid for six months. The good news is that salaries for March and April have been paid in recent weeks.

            meaning that now “only” six months are still owed to personell. Oh, and the airline (which is secured by guarantees from many of his other holdings) is still grounded until a re-financing deal is struck (and presumably taxes are payed to the state). In that light its quite a bit one that he can find 50 million to invest into FI I would say @journeyer.

  9. Fist of all Vijay says ““We had a board meeting in India after the Abu Dhabi Grand Prix and the board has approved a £50 million capital investment programme for the team,”

    He does NOT say “I have decided to pump in £50 million of my own money into the team”

    I am pretty sure but I speak under correction that this has to do with the previous tie-up with Saharah – was there not some sort of agreement of large payments over a period of years when he got them onboard?

    Secondly, the airline he is involved with, has NOTHING to do with his F1 team – they operate SEPRERATELY – something he has himself stated over and over. Money from investors in his F1 team can not be taken and paid over to airline employees! The very notion is ridiculous.

    1. @cronies Just a small problem: many of the FIF1 sponsors are Mallya brands (particularly Kingfisher). If they collapse (especially Kingfisher), wouldn’t that affect the F1 team’s cash inflow too?

      1. Yes without a doubt – forntunately they do have other sponsors and hopefully (as a F1 fan) they can attract more if required. Remember while Vijay is a owner of FIF1, he is only a part owner – not even 50% – there is more to F1FI than just Vijay – same goes for these other companies. (In a previous post someone stated he only has 15%stake in United Spirits)

        Becuase he has a stake in one buisness that is going belly-up does not mean the others he has a stake in can not go from strength to strength. Not does it mean there can not be capital investement in any buisness he has intrests in becuase of the problems of another.

  10. Welcome news for what I consider the dullest team in F1. They’re going to have to work hard for podiums and Lotus being as good as they are won’t help them.

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