Vijay Mallya increased his support for Force India in 2010
While the airline Kingfisher is at the center of economic news in India due to its financial troubles, it had significantly increased its contribution to the Force India budget for the 2010 season. This raises the question of the team's financing in the future.
Kingfisher Airlines is currently experiencing significant financial difficulties, to the point that its bankruptcy seems to be a possibility considered by more and more financial analysts. This could have important repercussions for all the companies in the conglomerate established by Vijay Mallya, due to the guarantees on the loans contracted by the airline.
However, the Indian businessman did not hesitate to ask his subsidiary to increase its financial contribution during the 2010 season. According to information published by the Daily Express, Kingfisher raised its sponsorship to six million pounds, which is 71% more than the previous year. The airline was not the only one to contribute as the alcohol division of the Mallya empire, led by whisky Whyte & Mackay, simply doubled its payment to Force India, reaching 6.7 million pounds.
Furthermore, Watson Limited, the personal investment vehicle of Vijay Mallya, also provided a loan of 13 million pounds to the Silverstone structure. This means that all the activities owned by the Indian businessman financed his F1 team to the tune of 20 million pounds during the fiscal year that ended on December 31, 2010.
This increase in sponsorship made it possible to generate a turnover of 48.5 million pounds (an increase of 17 million compared to the 2009 season), which limited the losses to “only” 26.7 million pounds, compared to 40.3 million the previous season.
Nevertheless, it is unlikely that this level of funding will be maintained in the long term since Vijay Mallya and his finances are likely to be occupied with rescuing his airline, whose debt reaches 65 billion rupees (or 947 million euros). Subrata Roy’s entry into the capital during the past season brought a breath of fresh air, materialized by an investment of 100 million dollars, enough to meet the development needs of the team.
However, Subrata Roy, the new chairman of the team’s board, does not share the same passion as Vijay Mallya and views F1 only as a support for his own business interests, as evidenced by the appearance of his Sahara group in the team’s name. Subrata Roy was thus invited to join the team’s capital only thanks to his support in Vijay Mallya’s other activities.
While the team has made progress over the past four seasons, financial problems of its shareholder could jeopardize its development in the upcoming seasons.
With the participation of RacingBusiness.fr
