Midland Group Sells MF1 Racing to Spyker
The Midland Group of Companies wishes to announce the sale
of 100% of its shares in Midland F1 Limited to Spyker Cars
NV ("Spyker").
Prior to the sale, Midland F1 Limited headed all Midland
Group motorsport activities, including ownership and operation
of the Midland F1 Racing team ("MF1 Racing"), which
competes in the FIA Formula 1 World Championship.
"The decision to sell the team has been one of the most
difficult I have ever faced," stated Midland Group Chairman
Alex Shnaider. "It is never easy to relinquish something
into which one has devoted so much energy and passion. However,
as much as I had hoped to witness the continuing growth of
the team under our ownership, I truly believe this transaction
is in the best interests of everyone involved - Midland Group,
Spyker, and the team.
"I am proud to be leaving the team in a much better
state than it was when we acquired it 20 months ago. Not only
is it more financially stable, it is also more competitive
at the track, and getting stronger all the time. The creation
of the 2007 car is well underway, as are major upgrades to
the wind tunnel facility. Investment into the team's technical
development has continued unabated throughout the season.
"At the moment, Formula 1 is a much more mature and
understood sport in Holland than it is in Russia. I believe
the new owners will be well placed to exploit the commercial
and nationalistic aspects of a Dutch identity, and this is
something that can only benefit the team.
"My partner, Eduard Shifrin, left the decision entirely
up to me, since he knows how important it is for me to see
the team not only survive, but succeed. With this in mind,
the new owners have demonstrated their ambitious plans to
take the team forward to the next phase of its rebuilding
programme.
"Spyker, headed by Victor Muller and Michiel Mol, consists
of a strong group of investors with the resources, planning
and capacity to further develop the team. I am confident that
under their leadership, the future of the team rests in good
hands, and I would not have agreed to this sale under any
other circumstances.
"Midland Group and I have been committed to the team's
success from the moment we decided to take it on. We have
always been, and will continue to be, Formula 1 fans, and
we wish the sport, the team and its new owners the greatest
success in the future."
In October 2004, Midland Group`s involvement in Formula One
began when Mr. Shnaider confirmed his plans to lodge an entry
for the 2006 season.
Although initially committed to the idea of creating a completely
new team for the 2006 season, Midland instead signed an opportunistic
deal to buy the Jordan Grand Prix team shortly prior to the
2005 Formula 1 season. As a result, the team competed as Jordan
Grand Prix in 2005, and re-branded itself as MF1 Racing for
2006.
"The time-line was tight, but by buying Jordan, we benefited
from having a ready-made team: the people, the facilities,
the know-how - all the elements we were previously looking
to piece together from scratch," recalls Mr. Shnaider.
"Entering the sport a year ahead of schedule was easier
to execute with an established team, although it still presented
us with a steep learning curve in 2005. But that's OK; we
learned a lot during the transition."
At the time of its acquisition by Midland, there were few
tangible assets in place to ensure the participation of the
Jordan team in the 2005 F1 World Championship, which commenced
in March 2005 in Melbourne - barely two months after the purchase
was completed.
Therefore, the first goal was to ensure that Jordan would
participate in Melbourne with three cars, complying with the
2005 FIA regulations. Within a very short timeframe, MF1 Racing
managed to fulfill the provisions of Jordan's prior agreement
with Toyota, thus enabling receipt of engines. The team also
undertook the task of modifying the chassis to accommodate
the Toyota V10 in place of the previous Cosworth powerplant;
designing a new gearbox to mate with the new engine; acquiring
sponsorships and signing new drivers. In less than two months,
the first goal - participating with three cars in accordance
with the 2005 FIA regulations - had been achieved.
The next goal was to establish the reliability of the race
cars while improving the team's cost efficiency. Existing
supplier relationships were examined and replaced where appropriate
and where a satisfactory cost/quality correlation would be
ensured. In addition, more work was brought in-house at MF1
Racing to enhance flexibility and cost efficiency. As can
be evidenced by both cars' combined race finish ratio of 84%
in 2005 and progress to date in 2006, the team's mechanical
reliability and consistency of performance has been successfully
established.
Phase 3 was the evolution of the 2005 car, the EJ15, and
increasing its competitiveness. The EJ15B aerodynamic package,
which debuted at the 2005 French Grand Prix, introduced a
number of performance gains. More importantly, these concepts
set the stage for the development and construction of the
2006 car, the M16, and allowed the team to significantly reduce
the gap to its rivals. The team is now, on average, some 2
seconds per lap closer to the front of the grid than it was
a year ago.
Off the track, the team's facilities and equipment have been
completely refurbished. The paddock hospitality centre has
been redesigned and three state-of-the-art technical trailers
have replaced the aging fleet of transporters. Investment
has also been made in improving the team's factory and wind
tunnel facilities, which are in the process of being upgraded
in scale from 40% to 50%.
"Our plans for the team were right on target. 2005 was
tough, as expected, but we relished the challenge and got
on with the job," says Mr. Shnaider. "In 2006, our
plans had begun to yield improved results. The team is now
a whisker away from the middle of the pack - and getting closer
at every race - and its reliability is better than that of
a few teams higher up the grid. At the factory, everything
has been reorganized and the team is poised to break through
to the next level. Spyker recognizes that, and we have recognized
in Spyker the ability to attract sponsorship from a robust
and enthusiastic F1 market. We feel that these sponsor dollars,
with an owner's investment similar to ours, will bring the
results quicker than it would have under our plan."
"I have experienced the highs and lows of being a team
owner, and for the most part, I've enjoyed it immensely. But
I do have a number of other business interests apart from
F1, which are much more significant in monetary terms, even
if they are not as high in profile. I generally found time
to attend only 5 or 6 race weekends in each of 2005 and 2006,
and hopefully I will be able to keep it at that level. Michiel
Mol has invited me to come and visit the team whenever I like,
and I am looking forward to watching the action and relaxing
with my guests in the paddock. "
"I would further like to thank everyone who helped us
achieve so much in this challenging environment in such a
short time: our drivers, mechanics, engineers, designers,
factory staff and team management, as well as our suppliers
and sponsors. They have all done a wonderful job, and their
future in this sport is deservedly bright."
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