Smirnoff pays 15 million dollars to Sahara Force India
After a week of absence, Smirnoff has indeed made its return to Sahara Force India. The contract between the two companies remains at 15 million dollars.
In Formula 1, even more than elsewhere, the truth of one day is not that of the next. For example, during the first week of testing in Barcelona, Smirnoff was not at all visible on the car presented by Sahara Force India.
But for the resumption of hostilities for this second week, the vodka brand’s logo was once again prominently displayed on the central part of the rear wing as well as just in front of the driver.
The reason for such a turnaround is that, between the end and the resumption of the trials, Smirnoff’s parent company, Diageo, reached an agreement with Vijay Mallya to settle the dispute between the two parties. In exchange for the resignation of United Spirits’ founder from the position of chairman, the spirits group drops all personal lawsuits against Vijay Mallya in the case of financial irregularities found within the former jewel of the Indian businessman’s empire. Mallya also negotiated a payment of $75 million, with $40 million paid immediately and the remainder spread over five years.
Another component of the agreement concerns another asset of Vijay Mallya, namely Sahara Force India. Thus, Diageo announced the extension for five additional seasons of the Smirnoff agreement with the Silverstone team: « Within the agreement announced today, Diageo has extended Smirnoff’s sponsorship of the F1 team Force India, of which Dr. Mallya is the director and co-shareholder, for the next five seasons. The cost of this sponsorship continues to be $15 million per season. »
But the dispute between Diageo and Vijay Mallya does not end there because Diageo is still claiming $135 million for a loan taken out by one of Vijay Mallya’s companies, Watson, which is based in Mauritius. However, the leader had used the 42.5% he owns in Sahara Force India as collateral.
As he cannot repay this amount without risking his other creditors turning against him, he may have to consider selling his shares. Diageo would almost become the majority shareholder of the team since Subrata Roy, who also holds 42.5%, is currently in prison and seeking to sell his shares to finance his bail.
With the participation of www.racingbusiness.fr
