Monday, September 3, 2007

Vijay Mallya bids for Formula One Team

UB group chief Vijay Mallya has joined hands with Spyker director of Formula One, Michiel Mol, to make a $109-million bid for the struggling team. The bid for the Silverstone-based team will be through MallyaĆ¢€™s company Watson Limited and Strongwind, owned by the Mol family.

"This offer has been accepted by the Board of Spyker Cars N.V. and exclusivity has been granted to the consortium Orange India Holdings Sarl to proceed with due diligence ... to achieve completion within 30 days," the partners said in a joint statement late on Friday.

Mallya will be the chairman and managing director and will nominate three directors to the board. The Mol family will nominate two directors.

"I have been dreaming about owing an Formula One team. I was looking at the right opportunity to show up at the right time," Mallya told a news conference on Saturday.

Dutch manufacturer of hand-built vehicles, Spyker Cars NV, owns the Spyker Formula One team, which it inherited from Midland for $107m in 2006. The team has since plunged into a financial crisis. Spyker posted a net loss of 29.9 million euros in the first half of the year, up from a loss of 1.1 million euros in the year-ago period. It has said it expects to make a loss this year. The Formula One team had a 13 million euro loss.

"I cannot comment on the 2008 budget now. If it has to go up by 30 to 40 per cent, and if it is justified, then we will tweak it," Mallya said.

"2008 will be the starting point for a gradual improvement. No miracles are going to be produced."

He said Spyker because of its status as a constructor is entitled to a share of television revenues and expects TV revenues of 25 million euros in 2008.

"The deal is good for Formula One. It's good for India and it's good for Formula One Management because viewership is going to shoot up now," he said.
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