F1 bankrupts another promoter (2nd Update)
Early this week, a Russian court declared that the government-owned 'Formula Sochi' company is bankrupt, even though a contract to host the race through 2020 is still in place.
But race organizers have hit back, insisting that the actual promoter since 2013 is OJSC Center Omega.
In a statement, the liquidation of Formula Sochi was confirmed, but Omega said it was not only in charge of the construction of Sochi Autodrom but also "the race-staging contract".
"It (Omega) also has had the personnel and the finances required," Omega added.
"The preparations for the (2015) Russian GP are well under way," the statement concluded.
Forbes' F1 business journalist Christian Sylt says Russia pays an estimated $44 million per year to host the grand prix, with Bernie Ecclestone having negotiated directly with president Vladimir Putin.
06/02/15
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| Russian F1 days numbered? |
(GMM) A company involved in the Russian grand prix has been declared bankrupt.
Media outlets including the Spanish agency EFE said Formula Sochi, owned by the government, was declared bankrupt on Monday in a Russian court.
With the key backing of president Vladimir Putin, Russia held its first modern world championship race last October, and is scheduled to host the second edition at the Sochi Autodrom later this year.
Formula Sochi's troubles actually date back to 2013, when we reported that the indebted race organizer would be liquidated by authorities.
We also reported that the bigger company, promoter and circuit builder Omega, had taken over full responsibility for the race.
EFE said Sochi's race contract runs until at least 2020.
In March, we reported that Omega had cancelled the Sochi Autodrom's scheduled May round of the Red Bull Air Race, an obstacle-dodging event for aerobatic planes.
Omega said the "current exchange rate situation" had affected the "balance between the operational costs and costs of the tickets".
But Omega insisted that the Russian grand prix, scheduled for mid October, remained the Sochi Autodrom's forthcoming "major event of the year".
06/01/15 Media reports said that the arbitration court in the Russian region of Krasnodar has ruled that public company Formula Sochi, an organizer of Russia's F1 Grand Prix in Sochi, has "gone bankrupt," according to IANS.
The company was indebted 5.8M rubles ($109,500), while its available assets totaled only 1.4M rubles ($26,400). Russia, which has "little experience with F1 racing," invested about $200M to build the Sochi Autodrom, which last year "hosted Russia's first F1 race and will remain on the racing schedule" until at least '20.
Under the agreement brokered by Russian President Vladimir Putin and F1 CEO Bernie Ecclestone, Sochi would host F1 races between '14 and '20, with the possibility of "extending the agreement for another five years." IANS