It is well documented that Vijay Mallya is in dire financial trouble at the moment, with reported debts of $2.5 billion at his Kingfisher Airline alone.
An arrest warrant was even issued against the Indian billionaire for unpaid user fees at India’s Hyperbad International Airport. His 11 planes are currently grounded, with one being impounded at London’s Heathrow Airport for unpaid fees, after the company’s aviation license was suspended by the Indian Aviation Authority.
Mallya has been under huge pressure to find investment in the region of $1 billion in order to get his planes back in the air – a difficult feat considering its debts and damaged image after failing to pay its staff for several weeks.
Why does this impact his Formula One team? Much has been speculated that the outfit might not have enough money to fund its 2013 campaign competitively and Mallya may be forced to find a buyer in order for it to continue operating.
Didn’t Subrata Roy Sahara just invest millions in the team through his Sahara India Pariwar company though? The billionaire did indeed purchase a 42.5 per cent stake in the outfit, but he himself has come under massive financial pressure after the Indian Surpeme Court ordered he repay investors $3.5 billion within three months, plus 15% interest (around $4.4 billion in total) otherwise his assets will be frozen.
That puts the team in a precarious position in terms of its finance. However, whilst alcohol isn’t the answer to life’s problem, it may just be the answer to Force India’s problems.
British multinational Diageo, the world’s largest producer of spirits, has just purchased a controlling 53.4 per cent stake in Mallya’s second, and profitable business, United Breweries – India’s largest producer of beer.
The deal will eventually be worth $2 billion once its completed and will provide Mallya with the money to reboot his ailing airline and hopefully, secure Force India’s long-term future.
Source: The F1 Times