Uralkali’s Force India case heads to court

Date published: July 19 2019

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Uralkali, who tried but failed to buy Force India last year, will face the F1 team’s administrators in court in 2020.

Uralkali, a Russian chemical company company owned by Dmitry Mazepin, was keen on buying the Force India team when it was placed into administration last July.

However, instead a consortium led by Lawrence Stroll took over the F1 team, rebranding it Racing Point.

Uralkali cried foul, blaming administrators FRP Advisory LLP and threatening legal action.

That is now going ahead with Uralkali revealing the matter will go to trial in late 2020 with the company seeking “substantial damages” after losing out to a “lower bidder” in what they feel was a “flawed sales process”.

A statement from Uralkali said: “On July 17, the High Court in London conducted a case management conference, which was an early procedural hearing, of the suit earlier launched by Uralkali against the Administrators.

“During this hearing the court considered case management issues and settled the timetable for further steps up to trial, which was scheduled to take place between October and December 2020.

“Prior to trial, the parties to the proceedings will be required to disclose certain correspondence and other documents relating to the Bidding Process, and will exchange witness evidence in April 2020.

“Earlier in December 2018, two US district courts decided to compel members of the Racing Point consortium residing in US to provide documents and testimony, which may assist in support of Uralkali’s claim in the High Court in London.

“Uralkali’s legal claim against the Administrators highlights significant areas of concern regarding the conduct of the Bidding Process, including:

* Failure by the Administrators to determine the highest bid in the process — from Uralkali — as successful;
* Misrepresentations and lack of transparency in the process run by the Administrators;
* A flawed sales process which failed to achieve the maximization of sale proceeds for creditors, shareholders and other stakeholders.”

Uralkali believe they made a financial offer far above what Stroll and his consortium brought to the table.

“Uralkali set out an extremely generous offer to acquire the company’s business, assets and goodwill, which included a cash consideration of between £101.5 million and £122 million, depending on the specific structure of other bids,” the statement read.

“The offer proposed sufficient funding to satisfy the claims of all creditors in full (including assumed claims) and included an undertaking to provide significant working capital and a new investment program over a 5-year term to ensure the future success of Force India.”

It concluded: “Despite Uralkali’s generous offer, which we believe was the best bid on the table, the Administrators chose to enter into an exclusivity arrangement with a lower bidder and subsequently refused to reengage with Uralkali or any other bidders.

“Due to Uralkali’s concerns as to the Bidding Process, Uralkali had no option but to launch these proceedings and seek substantial damages. Uralkali intends to continue vigorous pursuit of its claims against the Administrator in the High Court in London.”

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