How to decimate your brand – a case study by Caterham

As one ‘insider’ put it to me yesterday, “it’s messier than a pit full of sh*te.” The expression being a reference to the news that Caterham Sports Limited (CSL) has been placed into Administration.

CSL (formerly known as 1Malaysia Racing Team (UK) Ltd) was the facilitator of the Caterham team’s Formula One effort; it built the cars and provided the engineering and infrastructure support to 1Malaysia Racing Team Sdn Bhd (1MRT), the holder of the Formula One entry licence.

UPDATE: 22/10/2014 – Caterham F1 responds..

Administator’s Statement

• Caterham Sports Limited – In Administration

  On Friday 17 October 2014 Finbarr O’Connell, Henry Shinners and Anthony Spicer, all of Smith & Williamson LLP, 25 Moorgate, London EC2R 6AY, were appointed as joint administrators (the “administrators”) of Caterham Sports Limited, the Leafield based manufacturer of the Caterham Formula 1 car. This Company has historically provided services to 1 Malaysia Racing Team (1MRT), a Malaysian company which operates the Caterham F1 Team in the Formula 1 World Championship. The administrators are in dialogue with 1MRT to see whether the previous service arrangements can be continued for the benefit of the creditors of the Company. Positive discussions were held between the administrators and the team manager, Manfredi Ravetto, and also with the financial backers of the team on Friday 17 October and it is hoped that these will lead to a financially acceptable arrangement for the continuation of the relationship between the Company and the F1 Team.

  If a financially acceptable arrangement cannot be agreed between the administrators and the Caterham F1 Team the administrators will then enter into dialogue with other interested parties with regard to a sale of the business and assets of the Company.

  The administration appointment was made by the charge-holder on the basis of the security which it holds over the Company. The charge-holder made the administration appointment following action by the Company’s sole director and shareholder, Mr Constantin Cojocar, to place the Company into formal insolvency through a court route.

  Mr Cojocar, a former professional footballer and football coach, has indicated in court papers that there was an intention that his associates would provide funding of £2m per week which would be used to pay the Company’s creditors but that, unfortunately, the money promised by his backers did not arrive. He has further indicated that due to the non receipt of these monies he had no choice but to request the court to put the Company into administration.

  The administrators’ immediate plan is to continue their efforts to maximise the value of the business and assets of the Company for its creditors. They will communicate all further important developments to the creditors by way of letter and also by way of an internet site, which will be publicised when set up, which they will populate with updates and further information.

  The administrators have not continued to purchase or accept supplies from the Company’s previous suppliers but rather 1MRT has entered into direct supplier contracts with those suppliers it wishes to receive supplies from.