Written by: Keith Tully
Published: 22nd October 2014
Caterham Sports Limited, a manufacturer of cars for the Formula One racing team Caterham F1, has entered administration and put hundreds of jobs at risk in doing so.
The business based in Leafield, Oxfordshire, is operated by 1 Malaysia Racing Team (1MRT) and currently employs 200 people whose jobs could be impacted by the situation – administrators say.
As it stands, employees of Caterham have been transferred to 1MRT.
It’s understood that Caterham Sports owes in the region of £20 million to external suppliers but the F1 team is apparently keen to continue operating as a competitive motor racing outfit. The team’s cars have been struggling to keep pace with their rivals throughout the current season in the Formula One drivers’ and constructors’ championships.
The racing team was formerly known as Lotus Racing and has failed to win a single point in the Formula One competition over the past five years. This poor return is thought to have prompted the AirAsia business tycoon and owner of Queens Park Rangers Football Club, Tony Fernandes, to sell the business to a consortium of investors earlier this year.
The new owners, who are from Switzerland and the Middle East respectively, are believed to have struggled to finance the team they bought or to make it any more competitive.
“Clearly, the parties who bought the business from Tony Fernandes have been unable to fund this company,” said Finbar O’Connell, administrator from Smith & Williamson.
“When it comes to F1 teams, you are normally dealing with one figurehead who is very much in the public eye. [However] the current owners of the Caterham Formula One team are not completely clear to me yet,” he said.
O’Connell went on to explain that Constantin Cojocar, a Romanian businessman has been acting as the sole director and shareholder of Caterham Sports since July 2014 when the company was sold.
The administrators said in an official statement: “Mr Cojocar, former professional footballer and football coach, has indicated in court papers that there was an intention that his associates would provide funding of £2m per week which would be used to pay the company’s creditors but that, unfortunately, the money promised by his backers did not arrive.”
Smith & Williamson said that its administrators intend to continue working towards maximising the value of cash that can be raised through Caterham Sports Limited and its assets in order to pay as many of the company’s creditors as possible.
*Image used under the Creative Commons license. Owner: Kevin Rodriguez Ortiz