Reports emerging today indicate that the Lotus Formula One team has been given an advance on its 2016 prize money following discussions with Bernie Ecclestone about the Enstone team’s long-term future.
Over £1.5 million has been given to the team in order to pay the wages of its staff during a time of very mixed fortunes for the squad. The 2009 titled winners (albeit in their Renault Sport F1 team guise) achieved a season’s-best finish at the Belgian Grand Prix before bailiffs sized the team’s property.
Counting the cost of competition
While a buy-out from Renault to become a works manufacturer once again looks incredibly likely, the team is faced with considerable debts and a ticking clock in order to meet the deadlines of its creditors.
The Times reports that Lotus Formula One owes £600,000 to more than two dozen creditors, having settled a deal with Pirelli over an outstanding payment of £250,000 – the situation having come to a head before the Hungarian grand prix, with the Italian manufacturer refusing to supply tyres for the race until the bill was paid.
In addition, the team is locked in a legal dispute with Charles Pic, who claims he paid to drive in practice sessions, which was not fulfilled. In July the team was threatened with a court closure due to its outstanding financial issues.
It is believed that the team has total debts close to £128 million, although the majority of this amount is long-term and thus carries less of a threat to the team’s immediate future.
Return of Renault
Insider accounts suggest that Renault is prepared to offer around £60 million for a 65% stake in the Lotus Formula One team, although the French manufacturer has yet to comment on whether it will be taking on the debts associated with the squad.
Renault sold their controlling stake to Genii Capital, a private equity business, in 2010. The Luxembourg business now jointly owns the team with Andrew Ruhan, a British property developer.
With the Italian Grand Prix face approaching, the team’s future looks to be safe for now. While Ecclestone and FOM’s altruism may appear skin deep, they will be eager not to lose such a prominent team from the grid and attract the negative publicity that would accompany such a loss.