There have been stories circulating in F1 circles in recent days suggesting that several of the teams are currently up for sale, or in need of significant investment. The primary underlying rumour in Delhi was the future ownership of the Lotus F1 Team. It has been clear for some time that Gerard Lopez’s Genii Capital is no longer willing to keep pouring money into the team and the word in recent weeks has been that Genii wants to sell 49 percent of the business in order to clear the debts that they have built up supporting it. Team spokesman Stéphane Samson has confirmed that Genii Capital has been looking for “minority investors”. A deal was close just before the Indian GP, but it seems that this fell apart at the last minute. One suggestion that Martin Brundle of Sky suggested in India was that the Malaysian car company Proton might be the buyer. Proton owns Group Lotus and there would be sound logic in consolidating the Lotus brand by adding the F1 team to the car company again. That would make Group Lotus a more saleable company. The problem is that all potential Group Lotus buyers have been scared away by the mountain debt that was created by the previous management at Hethel. This is believed to be in the region of $400 million. Many in the industry think that it is impossible for Group Lotus to come back from such a situation, unless it can get the banks to swallow the debt. Unfortunately, the loans come from banks that have already lent large sums of money to Proton’s parent company DRB-Hicom and this firm cannot afford to upset its bankers.
DRB-Hicom has debts of around $2.1 billion and it wants to reduce this burden to more manageable levels. In recent days it has started to divest itself of non-core assets in an effort to reduce its debt load, selling its Hicom Power subsidiary for $190 million, in order to repay borrowings taken to finance the acquisition of Proton. It is anticipated that further asset disposals will take place, including the sale of DRB’s stake in Bank Muamalat, the insurance company Uni.Asia Capital and perhaps even land that the company owns in Johore. It is also expected that Proton will sell off all surplus assets.
It is clear from these figures that DRB-Hicom is not in the market to spend money on a Formula 1 team. Putting the elements of the Lotus brand back again is a good idea, but only if the resulting company is more saleable as a result. In any case, Samson says that Proton is not involved in the F1 dealings.
The fear is that no sponsors will come forward and it will be left to the owners to pay the bills, which obviously they do not want to do. However the team has done very well this year on the race track, despite not winning a race, so the shareholding is an attractive asset (depending on the price, of course) and the team does not much care who owns the shares, if there is enough sponsorship to allow them to continue to improve. The fact that Kimi Raikkonen has been confirmed for next year suggests that the team and the Finn are confident that the team will be fine, no matter what dealings go on over the ownership.