Williams plans to sell its Formula 1 team
Considering the difficult Formula 1 seasons that the Williams team has faced, an option that seems tempting is to sell the team to ensure its future in the sport.
This virus has put many Formula 1 teams to the test. Some have been saved from the budget cap while others like Williams are considering an alternative.Last Friday, the British team announced that they are considering choosing to sell the Formula 1 team, carrying out a trial if there are interested buyers..
In fact, financial consultants were hired to attend its review and to find the so-called interested parties in the purchase or investment.
The Williams team released a statement saying: “The WGPH board is undertaking a review of all the various strategic options available to the Company. Options being considered include, but are not limited to, raising new capital for the business, a divestment of a minority stake in WGPH, or a divestment of a majority stake in WGPH including a potential sale of the whole Company.
“Whilst no decisions have been made regarding the optimal outcome yet, to facilitate discussions with interested parties, the Company announces the commencement of a "formal sale process.”
It appears that the buying opportunities did not cause a sensation, while the investment opportunities created controversies within the team.
“The Company is not in receipt of any approaches at the time of this announcement and confirms that it is in preliminary discussions with a small number of parties regarding a potential investment in the Company,” adds the statement.
“There can be no certainty that an offer will be made, nor as to the terms on which any offer will be made. The WGPH board reserves the right to alter or terminate the process at any time and if it does so it will make an announcement as appropriate.
"The WGPH board also reserves the right to reject any approach or terminate discussions with any interested party at any time.”
Last year, the team faced a $13 million loss from a $12.9 million profit from the previous year. Hence the decision to evaluate the option of a strategic team review.
In 2019 their revenue decreased to $160.2 million from $176.5 million in 2018. While its Formula 1 revenue fell to $95.4 million from $130.7 in 2018, with losses of $10.1 million compared to profit of $16 million earned the previous year.
In addition, Williams has terminated the contract with ROKiT.
Mike O'Driscoll, the managing director, indicated that Williams had announced the conclusion of the sponsorship agreement with ROKiT, which should have been extended until 2023.
Confirmation comes with the tweet that the team posted.
Williams can confirm it has terminated its sponsorship arrangements with ROKiT effective immediately. pic.twitter.com/f2vgYDyRi7
— WILLIAMS RACING (@WilliamsRacing) May 29, 2020
O'Driscoll also said that the decrease in revenue weighed on commercial rights income due to the team's lack of competitiveness.
“The financial results for 2019 reflect the recent decline in competitiveness of the F1 operation and the consequent reduction in commercial rights income” Mike O’Driscoll affirmed.
“The 2020 Formula 1 season has, of course, been disrupted due to the COVID-19 pandemic, and this will have an impact on our commercial rights income this year.
"The Team have also served notice to terminate its relationship with its title partner, ROKiT, and major sponsor, ROK Drinks. In common with many other businesses, we have taken extensive action to mitigate, including a prolonged furlough period for much of our staff.
"As this awful global crisis recedes, everyone at Williams Racing is looking forward to the start of the new season.”
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