Will Lotus F1 survive?

[RYH64E]

VolvoT5 said:

quite incredible that a team that was fighting for wins and possibly even a WDC only 3 years back is now practically bankrupt. Really goes to show the sport is too expensive or the team has exceptionally st management.

Not incredible at all, F1 is mostly a marketing tool for companies to sell stuff, success is measured in units sold not races won. Unlike Red Bull, Mercedes, Ferrari, Honda etc, Lotus have nothing much to sell (there's little or no connection with the company based in Hethel and even if there was Lotus Cars is far too small to fund it's own F1 team).

[Smollet]

RYH64E said:

Not incredible at all, F1 is mostly a marketing tool for companies to sell stuff, success is measured in units sold not races won. Unlike Red Bull, Mercedes, Ferrari, Honda etc, Lotus have nothing much to sell (there's little or no connection with the company based in Hethel and even if there was Lotus Cars is far too small to fund it's own F1 team).

They might be virtually bankrupt but they can still make a better chassis than McLaren with all their money can by the looks of it.

[Slyjoe]

RYH64E said:

VolvoT5 said:

quite incredible that a team that was fighting for wins and possibly even a WDC only 3 years back is now practically bankrupt. Really goes to show the sport is too expensive or the team has exceptionally st management.

Not incredible at all, F1 is mostly a marketing tool for companies to sell stuff, success is measured in units sold not races won. Unlike Red Bull, Mercedes, Ferrari, Honda etc, Lotus have nothing much to sell (there's little or no connection with the company based in Hethel and even if there was Lotus Cars is far too small to fund it's own F1 team).

When Genii bought Renault they told us they knew it was an expensive game, but they were fine with that, as they were using it as a networking tool for all of their other sub-companies.
F1 is a lot about the business deals done in the paddock, probably more so than the racing.
Turns out their pockets weren't quite deep enough.
I had a mortgage to pay, so buggered off quite quickly at that point, but there are 300 odd people there paying mortgages and god knows how many in the supply chain doing the same.
The Renault buy out is fantastic news if and when it happens.
Fingers crossed it all goes as planned.

[n3il123]

Seems they were in court again today and the judge has given them another 10 days to sort their st out or they're going into administration.

[Impasse]

n3il123 said:

Seems they were in court again today and the judge has given them another 10 days to sort their st out or they're going into administration.

Yep, £900k to be paid to HMRC within seven days. BBC clicky

[rubystone]

n3il123 said:

Seems they were in court again today and the judge has given them another 10 days to sort their st out or they're going into administration.

It seems the loose ends will be tied up next week. Renault will buy Lotus and enjoy 'heritage' status.

If VW buy Red Bull, will they be fitting the old W12 engines from the Conti? Clearly a nonsense rumour...unless VW agree to licence someone else's engine...but pretty unlikely, one would have thought...

[Scuffers]

rubystone said:

It seems the loose ends will be tied up next week. Renault will buy Lotus and enjoy 'heritage' status.

If VW buy Red Bull, will they be fitting the old W12 engines from the Conti? Clearly a nonsense rumour...unless VW agree to licence someone else's engine...but pretty unlikely, one would have thought...

exactly..

only engine they could re-badge would be Renault's, and why the hell would they want to do that?

IF (and it's a f**king bif IF) they wanted to get into F1, they would do their own powertrain (else why would they bother?).

realistically, they don't need to as their WEC programme is doing a better job for their hybrid marketing credentials than F1 ever could (WEC is into the US market where F1 isn't too)

[HarryFlatters]

Renault sign Lotus buyout letter

Link doesn't work yet as I don't think they have written the story, but the headline is on the BBC F1 page...

[Paddle Shift]

The link works now and the story has been added:

Renault sign letter of intent to buy controlling stake in Lotus F1

Renault have signed a letter of intent to buy a controlling stake in Lotus.

Renault have been in talks to buy Lotus for several months and the latter's financial position has become precarious as time has dragged on without a deal.

But in a statement on Monday, Renault said it was the "first step towards the project of a Renault Formula 1 team" from the 2016 season.
Lotus are due in court on Monday over unpaid tax.

Renault say the move represents the ambition to extend their 38-year involvement in F1.
Renault had a previous involvement in the Oxfordshire-based team, selling their remaining shares in 2010. and Lotus's current owner, Genii Capital, has recently scaled down its investment in the team.
More to follow

[Jasandjules]

That should be enough to keep HMRC happy though.

[Paddle Shift]

Jasandjules said:

That should be enough to keep HMRC happy though.

HMRC won't be happy till the funds are in their account. I suspect payment may be made to them today.

The other creditors, many of whom are small businesses will have to wait I guess.

[rubystone]

Paddle Shift said:

HMRC won't be happy till the funds are in their account. I suspect payment may be made to them today.

The other creditors, many of whom are small businesses will have to wait I guess.

Indeed. As I know to my cost, a Letter of Intent is worthless in law.

Isn't there something in what passes as the Concorde Agreement now that stipulates that prize money is not paid out to a team that is in or has been in administration? I'd hazard a guess that if there is, this is the reason why the LoI has been issued.

[Paddle Shift]

By rights it has been heard already...

ROYAL COURTS OF JUSTICE
COURT 30
Before MR JUSTICE BIRSS
Monday, 28 September 2015
At half past 10
GENERAL LIST
Part Heard
5528/2015 In the matter of Lotus F1 Team Ltd
Between: The Commissioners for HMRC v Lotus F1 Team Ltd

[Paddle Shift]

The case was again adjourned this time until 7th December whilst they sort out the deal with Renault.

Clearly the letter of intent must have carried some weight given that the Judge went back on his order. I'm guessing a lot more was provided to show him that the team will be in funds shortly.

Watch this space.

[Chrisgr31]

Joe Saward suggested that Renault are paying HMRC the amount that they are owed, hence the adjournment. Apparently they were meant to send it on Friday but didn't manage it, but guess the judge believed it will be sent today.

[Galileo]

RYH64E said:

VolvoT5 said:

quite incredible that a team that was fighting for wins and possibly even a WDC only 3 years back is now practically bankrupt. Really goes to show the sport is too expensive or the team has exceptionally st management.

Not incredible at all, F1 is mostly a marketing tool for companies to sell stuff, success is measured in units sold not races won. Unlike Red Bull, Mercedes, Ferrari, Honda etc, Lotus have nothing much to sell (there's little or no connection with the company based in Hethel and even if there was Lotus Cars is far too small to fund it's own F1 team).

Williams seem to manage ok.

[Chrisgr31]

With the announcement of Palmer as a 2016 driver you might think that the future is rosy at Lotus but is it? What is actually happening?

According to Joe Saward https://joesaward.wordpress.com/2015/10/23/progres... Lotus have cleared a lot of debt recently, but according to Judge 13 the Palmer deal casts doubt on the Renault deal http://thejudge13.com/2015/10/24/palmer-announceme...

So what is happening?

[MartG]

Chrisgr31 said:

With the announcement of Palmer as a 2016 driver you might think that the future is rosy at Lotus but is it? What is actually happening?

According to Joe Saward https://joesaward.wordpress.com/2015/10/23/progres... Lotus have cleared a lot of debt recently, but according to Judge 13 the Palmer deal casts doubt on the Renault deal http://thejudge13.com/2015/10/24/palmer-announceme...

So what is happening?

They needed the money urgently and Palmer was ready to sign on the dotted line, whereas Renault have been fannying around for months and seem to be no nearer actually taking over ?

[thegreenhell]

Chrisgr31 said:

With the announcement of Palmer as a 2016 driver you might think that the future is rosy at Lotus but is it? What is actually happening?

According to Joe Saward https://joesaward.wordpress.com/2015/10/23/progres... Lotus have cleared a lot of debt recently, but according to Judge 13 the Palmer deal casts doubt on the Renault deal http://thejudge13.com/2015/10/24/palmer-announceme...

So what is happening?

The whole premise of the TJ13 article casting doubt on the Renault takeover seems to be that Renault always have a French driver in their works team. That may have been true for the original French Renault factory team, but in the entire Renault ownership of the Enstone team from 2000-2010 the sum total of French drivers in the team was the seven races at the end of 2009 when Grosjean took over from Piquet Jr. They had Italian and Austrian drivers when they first purchased Benetton, then they replaced them with another Italian and a Brit for the first season they ran under the Renault team name.

It's a non-story, imo.

[SteveSteveson]

Chrisgr31 said:

With the announcement of Palmer as a 2016 driver you might think that the future is rosy at Lotus but is it? What is actually happening?

According to Joe Saward https://joesaward.wordpress.com/2015/10/23/progres... Lotus have cleared a lot of debt recently, but according to Judge 13 the Palmer deal casts doubt on the Renault deal http://thejudge13.com/2015/10/24/palmer-announceme...

So what is happening?

Bugger all. Nothing will happen until December. Lotus are trying to make it look like business as usual, so as not to run afoul of laws that might make directors liable, whilst trying to drag the corpse of a team to the end of the season in the hope that they will pay off enough of the debts with prize money for someone to buy them out.

The courts have probably left the team be knowing that other creditors will be in a better situation if they get the prize money, but HMRC want their money now, knowing that one the one hand they will be a secured creditor if Lotus were wound up now, but on the other hand have no control over how much debt they are owed if it keeps going on and on. They can't just pull credit like everyone else.

As for Renault, lord knows what they are doing. Initially I thought they were waiting until the team goes bust and buy them up for a nominal price plus the debt with the ability to make anyone they want redundant, but now I am not sure. If the team goes then the liquidators will surely get more money by selling parts off (Perhaps McLaren would like the chassies... ) unless they buy up the debt, in which case they have nothing to gain by waiting, just more debt to pay being racked up. The only thing I can think they are doing is that they think they will get a better deal on the debt with creditors if they wait.

Edited by SteveSteveson on Monday 26th October 15:58