#wheeltalk

Some of you might’ve heard of it, those that didn’t should now. In the course of this race weekend, news came out that equipment and the cars of the Haas F1 team could be seized, as they owe their former sponsor Uralkali money, and as long as they don’t repay that money, their assets, in this case cars and equipment could be seized. All of this could lead to them missing the Italian Grand Prix, if not more, but what exactly happened and what will Haas do now? I’ll try to answer these questions and give my opinion on the situation, but i’ll preface all of this by saying that I am not legally involved in any of this, which means I can also only give you public knowledge and while i tried my hardest to research all the facts, it’s impossible to be sure that everything is correct, but more to that later.

Back to the problem; where did all of this start?

Uralkali ‘is a Russian potash fertilizer producer and exporter’ as stated on Wikipedia. It’s a pretty big company with a lot of assets, in 2018, they had assets worth roughly $8 billion. With these big numbers in mind, Uralkali became a sponsor of Haas in 2021. I’ll make a separate post about  sponsors, but important to know for this is that sponsors hold contracts with the teams. They give the teams money that's needed and in return, depending on how much they gave, they get things back from the team. As you’ve probably guessed, Uralkali gave quite a big sum of money to Haas, they became title sponsor, so for 2021, Haas was officially called ‘Uralkali Haas F1 team’, their cars livery was in the russian flag and they signed Nikita Mazepin, son of Dmitry Mazepin who’s one of the most influential Uralkali shareholders. It’s not quite clear how much money Haas got, but multiple sources talk about roughly $12 million, which makes sense if you take all factors into account.

From the money Haas made, they bought equipment and parts for the cars, so as far as sources state, all the money they initially got has been used up.

In 2022, following Russia's invasion of the Ukraine, many business people and oligarchs were sanctioned. I could not find clear statements of Uralkali itself being sanctioned too, but considering that most of the owners and shareholders are, I would assume that that puts the company also under certain sanctions. The important part here is that both Nikita and Dmitry Mazepin have been put under sanctions. These sanctions consist of asset freezes and travel bans, which resulted in Nikita Mazepins contract and the sponsoring contract being terminated by the team. 

Now this is where the problem starts; by contract, there's usually a clause that does not allow one party of the deal to just withdraw, at least not without paying their shares back. Due to the sanctions, though, it was not possible for Haas to pay the money that they owed back.

According to multiple sources, there was an arbitration court hearing in June in Switzerland, in which the court ruled that Haas needs to pay back the money that they owe Uralkali. Again, different sources talk about different amounts of money, since the ruling was kept private, but Uralkali states that by contract, they are also owed "a team race car from the 2021 season”. It’s difficult to rule out what really happened as different sources state different things, but they all have in common that Haas did not meet the required time to pay back whatever they owe, may that be because of the sanctions or because they lack the money, the important point is, Uralkali proceeded with a bid to get their court ruled money in assets. This race weekend, Haas has been apparently visited by bailiffs to evaluate what assets are of what value that could then be owed to Uralkali.

All of this is pretty irrelevant to the dutch grand prix, as it has been made sure that the valuation and official proceedings do not happen during the day and Haas has been ensured that this race weekend would continue, this could change though for the italian grand prix. If bailiffs decide which assets are worth the amount they owe Uralkali, these could be kept in the Netherlands until Haas pays or be taken as substitute for the money, although I am not sure where the legalities would lie there with what Uralkali is allowed to do with the assets then. 

The big problem for Haas right now, is paying. It's unclear if Haas has the money to pay it back, if they do it would obviously be a big setback because we are talking about millions of dollars here, but there is another problem; due to the sanctions, Haas states, the process of paying is difficult; “Haas has been working with its lawyers to ensure payment will comply with all relevant US, EU, UK and Swiss sanctions and regulations.” Uralkali states that this is not a good reasoning, but politics are difficult to follow, so even with extensive research I cannot guarantee you that paying is even a possibility without breaking sanctions by certain countries. For Haas the problem stays; they need to pay before Monday, or their assets will not be allowed to leave the Netherlands.

Due to this, rumors have surfaced, saying that this could be the end of Haas. Even if they pay the money and can compete in Italy, a lot of people expect it to be the final hit for Haas and possibly result in the team leaving or being bought up by Andretti, an American company that has tried to get into F1 for a while now. As of now, i cannot answer these rumors based on proof, but i can share my thoughts; leaving the sport completely is not as easy as it seems, there are contracts and rules, depending on the contracts, just leaving could cost Haas even more. Although selling the team would bypass these rules, selling a team takes time. Andretti could benefit from Haas being cheaper to buy than it would usually be, if the owners want to leave they’ll want to do it fast and for a team like Haas, you really cannot ask for much. In the end I do think though, that the rumors are unwarranted. If Haas gets sold, it's because they got a good offer, not because they suddenly want to leave when things get hard, especially since things were never easy at Haas to begin with.