Group Lotus has managed to secure funding amounting to $440 million to fund its planned expansion in the course of the next seven years. The loan comes from six Malaysian banks. The word in Malaysia is that political pressure was applied to get the loan through as the Group Lotus business plan is – at best – optimistic, and relies on the company increasing sales to 7,000 cars a year, from the current level of around 2,000. The company has already burned through a large chunk of parent company Proton’s cash reserves in recent months. It will be interesting to see what happens next, but there are rumours in F1 circles of Proton looking in depth at its management structure in England. The company is waiting to hear from the High Court as to whether it will be allowed to exploit the link to the Lotus name in F1, when the car company was not involved with the racing and Team Lotus claims to have the rights to exploit the Team Lotus name. If Group Lotus loses the case, there may be further litigation relating to damage done to the Team Lotus brand in recent months.
Group Lotus has had an application for $45 million from the Regional Growth Fund in Britain turned down.
Still hating Mr. Saward?
Arrib
Still hating what? Stupid remarks like this one. Yes. I hate it. Why bother?
Is this the Renault Lotus or the Fernandes Lotus? It’s hard to keep track!
There is no such thing as a Renault Lotus. Otherwise Sebastian Vettel would be saying: “I had a great dive today with the Marlboros and the Vodafone of Lewis Hamilton.”
Anyone who uses the expression Lotus in relation to a Renault is either making a mistake or is badly informed. A Renault is a Renault. A Lotus is a Lotus.
We saw how the last super car manufacturer fared with comparable plans and loans (DeLorean). Not to mention the trouble Saab is having to up production even when all production facilities and designs are in place.
Some banks are going to need a big bailout in a few years (months?) from now. Good thing at least the British govt. did not let itself be pulled into this.
Fernandes might be happy to see Group Lotus having enough cash at hand to pay his claims after he wins that court case
“The company has already burned through a large chunk of parent company Proton’s cash reserves in recent months.”
This was to be expected and to me it was quite obvious as I wrote in this and other blogs last year.
Remember that the plan was to launch five new cars and make Lotus Cars a British Porsche. I wrote previously that Bahar had/has a fundamental ignorance or deliberate misunderstanding of the UK car market and the British mindset and it would be only a matter of time before the near bankrupt Proton Group is bought by Tony for £1.
The thing that disturbs me most about this is that there are some good blokes at Lotus Cars whose jobs have been endangered by the glory hunting Bahar.
You could say whoopee! they are saved by the multi bank loan, but it is a loan, and Group Lotus is already paying a very high percentage of its turnover in interest and loan servicing to Proton and the Proton Group Bank who provide rolling 30 day guarantees.
I can only guess from my memory of the GL accounts and the LGIL (who own GL) accounts from last year, but the new additional loans will take up pretty much all of the current Lotus cars + Lotus Engineering turnover. I see a foreclosure and once again a £1 deal with Tony.
Is it a coincidence that we did not catch even a glimpse of him at any race last year and so far no this year either? Have Genii banned him?
If/when GL loose the court case the livery can return to proper Renault colours, which are respected in their own right on their past performance. The current owners Genii must be a tad worried having their headline brand sponsor both running out of money, and endangering it’s parent company, (which we knew was on dodgy ground last year) and by now I should think must be well into plan B strategy development.
Don’t get me wrong, I respect both the Renault teams’ and their drivers’ achievements and am a fan of Nick. It’s just bbbbbbbahar!
So Joe if the best (oops) happens and GL loose the suit (and maybe shirt) Can Genii Renault carry on racing without the GL money?? Have they a plan B? C, D, E…..
$440 million is rather less than the $1b they were planning on. It also makes their ambitions in F1, GP2, GT2, GT3, LMP1, LMP2, an FIA accredited test track, Indycar aero, Indycar engine, new distribution and support network and of course the 5 new models seem even more… ‘optimistic’…
Any idea how GL faired in court?
Political pressure applied for banks to make loans to people who otherwise wouldn’t qualify. Sounds very familiar.
Classic peak-of-a-bubble mentality.
Dany Bahar must be one hell of a salesman, how he manages to convince anyone to fork out big money for his massive Ego trip bewilders me.
Are you aware when the judgment is supposed to be handed on the Team Vs Group case, I am really curious as to how this is all going to turn out. Im assuming we wont hear anything until the case is done.
I guess magic beans are a national delicacy in Malaysia and Dany Bahar has a monopoly. Bernie would have struggled to pull this deal off.
Even a basic count of what this is going to add to each car shows that it is simply insane.
Joe,
Any idea why Renault displayed the rival 1Malaysia logo on the R31′s front wing pillar in China on Friday?
See here – (http://www.hunnyf1.com/wp-content/uploads/2011/04/Renault-Shanghai-Friday-8.jpg)
Quite an odd occurrence, particularly as they are competitors on track, in name, and in court!
Fil.
Does anyone else find it bizarre that Group Lotus’s Renaults have 1Malaysia logos on them?
http://www.hunnyf1.com/wp-content/uploads/2011/04/Renault-Shanghai-Friday-8.jpg
Just when I thought it can’t get any more confusing.
Pandamasque,
Very bizarre, but i guess they feel the need to suck up to the government at the moment. 1Malaysia is the PM’s personal campaign to united Malaysians, no matter their race.
This is probably one of the most neutral articles I have had the pleasure of reading by Joe. I mean no offense,Joe, I am trying to work out why Arrib made that comment.
Hating what? Exactly.
On a slightly different note, it seems to me the GL is shooting themselves in the foot. They appear so secure and so adamant that they will kill off Team Lotus, that they have initiated this huge road car programme, but without the proper funding. Borrowing half a billion, without having the proper foundation for their road car programme, is not good finances. Sure, loaning half a billion is great, but then what? People needs to buy their cars….
Fil,
since 1Malaysia looks to be a political programme, not a commercial one, i imagine GENII were paying tribute to the recent financial engineering they could not have pulled off alone.
sorry, Fil,
to explain: Group is well short of cash, and a big chunk of that new money is presumably due to the GENII outfit in some shape or form.
Doffing their caps, no more, no less.
“joesaward
There is no such thing as a Renault Lotus. Otherwise Sebastian Vettel would be saying: “I had a great dive today with the Marlboros and the Vodafone of Lewis Hamilton.”
Anyone who uses the expression Lotus in relation to a Renault is either making a mistake or is badly informed. A Renault is a Renault. A Lotus is a Lotus.”
It’s a Lotus Renault GP. Guess you better straighten out Mr. Vettel then…
“Sebastian Vettel: Yeah I guess so. Another great day. The start was crucial. I thought I had a really good start and then I saw Lewis lining up behind me quickly. Then I was surprised going into turn one as all of a sudden I saw something black in my mirrors. I knew it was a Lotus and then I realised it was Nick.”
Jim
Funnily enough, I did explain it to him
“The word in Malaysia is that political pressure was applied to get the loan through”
The word according to who? Fernandes?
The money came from an international consortium of banks. Non-Malaysian banks dont give a sh@# about political pressure from Malaysia, if there ever was any.
If you are going to be biased about ur analysis of facts, at least use some facts instead of relying on gossip and whispers from just the Fernandes camp.
Ur overwhelmingly pro-Fernandes stance is beyond a joke.
At least make an attempt to speak to the other side and to get another perspective or can you not be bothered at all.
Abuse away….
Sawan
In that case, the bankers are stupid.
Well i think the group lotus colours are fantastic, but, shame about the finance they secured from the malaysian banks. Are the banks barking mad, knowing there is a court case going on about the legality of name ownership, which reading between the lines i think tony fernandes has an ace card at winning this case, no disrespect to geneii and renault but danny bahar you’ve been a naughty boy. Not getting your facts straight and using the old fashion american muscle to bully your way through the proccess. But im sorry, it dont work in old blighty or in europe. Legal documents that what count. Isnt it funny ive a feeling that the group lotus will be using part of the new finance package to probably pay team lotus from the litigation group lotus could now be exposed to. You could see the banks and the investors, Quite rightly screaming for the return of their money.But the banks, i just cant belive how foolish their belief that this court case is clean cut in group lotus favour. As you can guess it will turn in to a horrible mess. I hope renault and geneii escape the carnage but then didnt geneii broker the deal with group lotus and danny beher………
“Dany Bahar must be one hell of a salesman, how he manages to convince anyone to fork out big money for his massive Ego trip bewilders me.”
Albert Spangler!
I think BasCB and Mr_Ten have hit this on the head; the current plans for Lotus are incompatible with what the market actually wants and where the company should be positioning itself. How Danny Bahar has managed to sell this to investors in the current climate is beyond me and the whole situation is very reminiscent of the DeLorean affair.
Indeed, despite the efforts to cut budgets Formula One is still a big bucks game that a small company like Group Lotus cannot, even with Proton’s backing, afford to be a player in. Moreover, the company has had its best run of success in the past 15 years by going back to the roots of Graham Chapman* and making small light cars using off the shelf engines and technology. The models unveiled in Geneva are a mistake and remind me of some of the efforts in the late 1980s to compete with Porsche, which almost killed Lotus and certainly did for TVR.
*This is off topic, but I live 500 metres from the original Lotus factory in Hornsey, London. It is still there and is just a jumble of sheds owned by Jewson. However, its shows the heritage perfectly.
I’m English yet if I was in the market for another sports car *I* would take a Porsche over a Lotus. If people like me don’t really want one of their cars God help their business plan.
Joe, et. al.,
presumably these loans came with a lot of nudge nudge wink wink implicit guarantees? (That 1M’sia logo again, though i’ve nothing against them, just admire the determination, and wonder who that is . . .)
We just learned the last week, that Brown’s lot actually promised bailouts in secret, before facts were known. I’ve never heard it said elsewhere, so i claim this rhetorical muse to myself, “who put the “bank” in bankrupt?” a man does not go bust until he is physically or mentally broken, and that pernicious reversal of language should take more blame.
Ok, more seriously, are these loans actually disbursed? Or are they contingent drawn down or other kind of facility, “for a rainy day”, i.e. they are window dressing?
rpaco,
i never heard of Albert Spangler, nor read Terry Pratchett, though Gilliam is cool by me. Simple reason: worked with a different kind of fantasist. “Great” salesman assault bodily with illogic. So do far more untoward characters. My personal pain, is to have been interested to think it was worth unravelling such nonsense. That’s a literal pain, health does suffer against stupidity. On one side resultant decreptitude due to unnecessary effort against little chance, on the other, that i might have to pay for my losses by not explaining publicly what i learned to help counter the utter rot. That is the trap, and it snaps viciously. Maybe literary fantasy is a escape, a catharsis and an anaesthesia. Bugger that, i’m going down as i set out! I shall now read some Pratchett, i think. Maybe it is like the recent ground breaking research that suggests that sorely injured Vets, can be medicated against pain, equally by immersive VR games (goggles and all that, alternative reality) as morphine.
DuncanConnors,
Don’t forget that John DeLorean was the consummate GM exec, fêted over a long succesful career, and genuinely had a reputation to trade with. Bahar doesn’t have that, does he?
– john
“Funnily enough, I did explain it to him”
And his reaction was???
You’d better have a talk with Mark Webber too. Just look at what he called the McLaren cars. Tsk,tsk,tsk…
“MW: Absolutely. I was looking for more yellow flags, a few more retirements, a couple of Vodafone cars pulled over but nothing, no yellow flags, I had to pass everybody.”
Please educate Mark and let us know what his reaction is.
This could be fun!
John O
Enjoy Discworld, some stories are better than others but most (or even Moist) have a delicious slow satire. Indeed one whole book is devoted to achieving the vision summoned by the very last paragraph the antithesis of a well known memorable image. Needs to be read by a very open mind, preferably one which has been stretched open by SiFi in it’s youth.
To take up your query, I should say that on looking out of the well dressed window at Lotus Group International Ltd one sees it pissing down outside.
We did not hear of a court verdict last week, perhaps this.
Hi Joe
Are you invited to the Team Lotus “incredibly exciting announcement about the future of our team” next Weds 27th during the aero test at Duxford? Related to the forthcoming outcome of the court case? If you know what it’s about, you probably can’t tell us…
http://lotusownersclub.com/wp-content/uploads/2011/04/Duxford.png
David B,
My guess is that it is a road car – but not one called Lotus.
Now that would be a very interesting one for Fernandes, Joe. Then he might beat Bahar to it in the car market as well!
Any lotus in black and gold is the real one.
Best bet is that Team Lotus is taking over Caterham and changing the name of the team.
Seems Sky News’s Kleinman thinks that will be a deal to take over the other company doing Lotus but not quite, Caterham!
(http://blogs.news.sky.com/kleinman/Post:8f4cbbfe-d52f-45f6-b63f-1da435550b9b).
Maybe then they could als start building Esprits and other typical Lotus cars, when Lotus Cars start building heavy and expensive cars.