Renault remains quiet about the executive committee meeting yesterday during which the future of the company in Formula 1 was one of the subjects under discussion. According to the latest sources in France the company has been looking for an exit strategy which will allow the company to leave without breaking the Concorde Agreement. Although it is believed that there are no sanctions specifically mentioned in the agreement, it is nonetheless a binding legal document and the signatories can therefore seek compensation if any party fails to keep its commitments. Clause 4.2 states that “each team undertakes to participate in the FIA F1 Championship each year for the duration of the term and to participate in every event”.
There are believed to be various get-out clauses for force majeure, such as wars, earthquakes, revolutions and so on but these do not cover lack of funding nor a management change of mind.
The agreement does allow for a team to be sold to another party and such a team can be renamed if the F1 Commission agrees. The situation is believed to be rather more complicated than originally thought, with two groups wishing to take over the team: one is popular with the Renault management in Paris; the other with the top management of the team in England. The danger is that if Renault sells the team to the wrong group, the major players will depart. Several are believed to have jobs lined up already.
The first of the two bidders is a company called GenII Capital, a Luxembourg-based private investment company, which invests in brands and ideas. This involves Gerard Lopez and Eric Lux, two men who have invested in such concepts as a Charlie Chaplin Museum in Switzerland, in the design of an alternative energy engine and a driver management organisation called Gravity, which has a number of drivers involved, including China’s Ho Ping Tung. It is rumoured that Gravity is also on the verge of signing Kamui Kobayashi. The partners are keen for the F1 project to pay for itself and would like to do B2B deals with Renault over technology that they are developing. They seem willing to keep the team as Renault F1 for two years. According to French sources this put them on pole position for the purchase.
However, David Richards is also bidding and wants to turn the team into Aston Martin in two years from now. This is believed to be the preferred option of the team members in England but may not be quite as attractive to Renault. It is believed, however, that the team would continue to use Renault engines for at least two years and they may be offering more money than GenII Capital, although this is not certain as the backers of Aston Martin have had some financial difficulties in recent years. Having said that Kuwait is a wealthy country, sitting as it does on 8% of the world’s known oil reserves. The global financial crisis has slowed the pace of investment and development projects, but Kuwait has the financial resources to do as it pleases in the longer term. Among those involved in the company are the Efad Group, which is involved in banking, insurance, real estate, the hospitality industry and the service sector., Kuwait’s Public Institution for Social Security , the business empire of Mohamed Saleh and Reza Yousuf Behbehani, whcih is the distributor and the agent for various well-known brands specialized in automobiles, tyres, watches, luxury luggage products, soft drinks and beverages, printing equipment, and soil test equipment; and the Mutawa & Al Kazi Company a major dealer in the automotive industry in Kuwait, which imports and distributes premier brands such as Honda. There are around 800 investors in the business from Kuwait, Saudi Arabia, United Arab Emirates, Bahrain, Qatar and Oman. The company has recently come to terms with its investors over its plans for the future after being caught out in the financial crisis.