Mallya moves in on Spyker

Liquor baron, who is a co-sponsor on the Toyota car in the Formula One circuit, is in the final stages of buying out an F1 team now

NEW DELHI: News trickling out from the F1 paddock suggests that Vijay Mallya has moved in to buy a controlling stake in the struggling Formula 1 team Spyker. While precise figures for such deals never see the light of day, Spyker's market valuation would easily be in the vicinity of $120 million.

Liquor baron Mallya who is the joint chairman of the two warring factions in Indian motorsports, has been in negotiations with bottom-end teams to take the next logical step in his involvement in F1.

Mallya's Kingfisher brand is splashed prominent on the Toyota cars - a deal that cost him in the vicinity of 40 crores. He is also the final screening authority as per the dictates of F1 head honcho Bernie Ecclestone on any F1 proposal from India.

Taking over Spyker, however, puts Mallya into the big league of calling the shots on the track. That in turn also translates into possibly more action for Indian drivers as Mallya's brand Kingfisher has consistently supported the careers of Narain Karthikeyan and Karun Chandhok.

"This is a great development and a huge step for Indian motorsport. I would love to be involved with an Indian team if it actually materialises," said Karthikeyan. While Chandhok is committed to GP2 for next year, Mallya won't be able to ignore Karthikeyan given his credentials and the following he has back home.

Buying a team is the only way to step into F1 quickly as fresh entries are now closed. Spyker is a good deal for it has its own factory, wind tunnel and cars unlike others like Super Aguri. This team first changed hands in end 2004 when Eddie Jordan sold out to Russian steel tycoon Alex Shnaider's Midland. The same outfit was bought last September by Dutch car maker Spyker which raised funds for the purchase through a new share issue and an interest free loan from Midland itself.

Buying is one thing, running a team quite another (see box). Spyker-MF1 had a reported budget of $120 million in 2006 while industry sources put it closer to $90 million.The team has had financial troubles with projected revenues not coming and costs escalating beyond estimates. A case in point being the desperate measure of taking on Japanese Sakon Yamamoto for a rumoured one million euro per race since the Hungarian GP.

Looks like the 'king of good times' has grabbed the opportunity to make the biggest Indian corporate move in the international sports arena. It remains to be seen if he manages to make it come good in the long run.