Movement at Lotus F1 Team

It is interesting to note that Infinity Racing Partners Ltd, which announced in June that it was buying 35 percent of Lotus F1 Team, has changed its name to Quantum Motorsports Ltd, to avoid any complications with Infiniti Red Bull Racing. This clearly suggests that the deal is close to being completed and that it has not gone away, as some have suggested.

This is good news for Lotus, which has been waiting for the money to arrive for four months. It seems that the delays have been caused by compliance questions arising from the transfer of such large amounts of money around the world, which is not easy these days.

The word is that when the money arrives Lotus will no longer have any debts and it will also have a solid budget for a number of years ahead, thanks to money from companies linked to the buyers. This would be similar in style to the arrangement that exists with Scuderia Toro Rosso and Aabar at the moment.

The one question that remains is whether such an advantageous deal also includes the eventual handover of control to the new investors. This is believed to be the case with Scuderia Toro Rosso, as Aabar is believed to have some kind of option arrangement with its backers, and it may also be the case with Lotus, as Genii Capital has not landed much sponsorship on the last few years so there is no real reason to invest in the team on that basis. It is far more likely that now Genii understands how tough running an F1 team can be, they would use this opportunity to offload more shares and cash in on the opportunity to get out. Team owner Gerard Lopez talks about his passion for the sport, but successful investors never let passion get in the way of a good deal. Remember that Genii was in effect given the team by Renault back in 2009 when the French firm wanted to get out of F1 following the Singapore Scandal. The Genii plan has always been to make money on the investment by putting value into the business – while also using it as a B2B operation – and then selling it. This is the most likely scenario behind the current events as the team has been losing staff and suffering with suppliers because there was no more money coming in from Genii.

It would be no surprise therefore to see Genii Partners Eric Lux and Gerard Lopez disappearing from the F1 scene in the months ahead. Their gamble will probably end up working, as they will have got the debts down to zero and still have shares left to sell, so the entire process will have been a success, even if it was a bit if a rough ride for those involved on the ground.

Watch out for news along these lines…

81 thoughts on “Movement at Lotus F1 Team

      1. In fairness, Fernandez did a deal with Team Lotus, who were the original F1 team. Contrary to the re-imagining of many, Team Lotus and Group Lotus / Lotus Cars were always 2 different companies The fault for confusion, if you will, was with Chapman.

        It is arguable that Team Lotus’ trademark should have been invalidated some years ago on the grounds of non-use, but that’s a different argument; it wasn’t, and so remained.

        I was quite sad when Fernandez gave in to Bahar, frankly. Everyone from Chapman onwards has been a ‘chancer’ in terms of Lotus’ involvement in F1; Fernandez was certainly no worse than the old man 🙂

        1. I think you will find that Fernandez decided it was not worth the hassle. Bahar was destroying Lotus and it made no sense to continue. Hence the switch to Caterham.

              1. Felt the use of the Lotus name at Enstone was a poor move that has had a very limited benefit (financially or otherwise) to the team. Personally I am hoping that some of the stories doing the rounds has some truth and that the Renault F1 banner may once again be unfurled in Oxfordshire – albeit as some pseudo-sponsorship tie-up as opposed to a return as a full blown works team – hell, why not Benetton – the damn logo is still set into the wall behind the Lotus F1 Team sign! At least the team can lay some historical claim to the latter two – which they cannot do with the Lotus brand.

  1. just one point .. debs will remain at Lotus in front of Genii capital, as the team was supply in cash flow by Genii. Seller of the team is genii who take the money .. the point is to understand if Lotus debs was out of the deal and remain as full charge for the new Partner . in this case that’s mean that new holder had sold 1/3 of the deb of lotus .. as it is part of the deal ..
    I rather think that Genii will maintain the control of the team with partners not involved in the racing managing, but directly dealing with the sponsoring aspect ..

      1. but you argree that the transaction is Genii capital/Quantum .? ..
        lotus will be credited of the money of the sponsorship, not of the transaction of te property of Lotus ..
        this is genii who will have this money .. and it will be a good deal for Génii only if they can sold at the amount they paid for Renault F1 AND the amount of the deb Lotus to Génii ..

            1. Debt is fine if you’re servicing it and it doesn’t mature. Some of Lotus’ debts will mature and require repayment; if there’s no money, that’s a problem.

              Well-managed debt is fine. Is this debt well-managed?

          1. what about current management at the team Eric Boullier and others? I doubt they think Lux and Lopez will leave the team any time soon. but new owners brings in new management?

    1. Only if new stocks have been issued (diluting Genii) the debt issue will be resolved. If Genii just sold 35% of their stocks the debt will still be there.

      1. It would be wisest to accept what you are told. I’m not making this stuff up. Perhaps there is crossing of T’s and dotting if I’s, to be done, but the reality is that the debt will go away.

  2. If you may allow me to ask a question??? Would it now be a good time for a driver to be leaving the team or joining the team?? In your opinion of course…

  3. Joe, As it looks like the deal is well and truly on, does this mean that there isn’t any threat that it could turn into the Qadbak saga who were linked with Sauber from a few years ago? The people around here as just about recovered from the Notts County fiasco.

      1. Joe you imply Kimi’s choice was a mistake.
        Tbh: Lotus or Ferrari? midfield team or pinnacle of F1? guarranteed funding and prestige or present financial straits and ambitions that may or may not be realised in the future?

        Those quantum people. Didn’t realise there was already the “Infinity” brand, which sounds so very similar to their “Infiniti”. And they were happy to lose the main component of success, who dragged the Lotus venture from midfield to fight with the teams at top of the grid. If there was a genuine chance of keeping Raikkonen, they should have grabbed it. Something just doesn’t stack up.

        1. Kimi did what Kimi felt was best for him. I’m not passing judgement on that. Time will decide whether it was right or wrong. The premise of you comment is thus not correct and all extrapolations on that premise as well

          1. It seems to me that Kimi figured that if he wants to win a championship in the new regs, Ferrari are more likely to do it than Renault’s second string team. Ferrari could also blow it spectacularly, but trading a certain race win or two at Lotus against a possible championship at Ferrari is a racer’s bet.

      1. I don’t want to post a potentially NSFW link here, but google “mansoor ijaz wrestling video”, I’m not sure the teams “rough ride” has ended…

  4. Thanks Joe, another glimpse behind the scenes that we don’t see elsewhere.

    On a tangential note, do you know whatever happened to the old rumours about the Qataris investing in Williams? Any ideas what stopped it from happening?

    There have been a couple of cases where teams have seemingly prepared their liveries for a big deal that’s subsequently not landed -Williams/Qatar National Bank, Lotus/Honeywell, any others I’ve missed?

  5. Joe – are you doing ‘An Evening with Joe’ in Austin? hope to see you there.

    Jeff Ashcraft
    longtime subscriber to GP+

      1. He was the son of ex-F1 driver Guy Edwards.. a driver from the 70’s that pretty much invented the way to market racing and sponsorship. Sorry for his loss

        1. I am fully aware of who he was and what his father did, as I have had many dealings with Guy along the way. I feel desperately sad for him and indeed for anyone who loses a child, but one has to make decisions about what to include and what not to include. I decided that it was not an F1 story although I see many websites, in their desire to fill space, did use it. Actually, there is more of a case than you perhaps realise as Guy was one of the principal competitors in the Aurora British F1 Championship in 1979 and 1980, his principal rival being Emilio de Villota… which is a horrible irony.

          1. What an awful week for motorsport. What are the chances that the two children of two drivers who raced against each other almost 35 years ago, should both die as the result of motorsport related injuries mere days apart ?! 😦

          2. This might be wrong, but I gather that both of them were involved in pulling Lauda out of his car after his Nurburgring crash? If so, how strange life can be…

        1. Joe, regardless of whatever people think – You are doing a fab job!! You are my source of news in the inside world of F1! Keep it up! We appreciate it!

      1. I don’t understand why people sit waiting to get on Joe’s back. Autosport ran it because they are a *motorsports* website, other F1 sites had to play a tenuous link game.

        I am beginning to think people are just jealous there is someone out there who can always teach them something!

        The only thing that occurred to me is with Edwards, de Villota and Simonsen, surely this would be a prime factor in the FIA election? Seems to me there is a need for action outside top-line championships and venues.

        1. This is a great blog Joe. I’m not sure why anyone would take time out of their day to complain about it. I guess they could always ask for a refund if they don’t like it…

  6. I can remember Quantum being the registered brand name of VAG UK car accessories.In that project I learned about printing on heavy card and not to trust over confident middle management.

  7. There is no connection between Lotus and Team Enstone really. Certainly no investment or debt swap between either company. I think Michel is making a link that does not exist.

      1. no confusion with lotus car in this case .. just the way to use the actual name of Benetton/Renault and now Lotus(génii)
        I imagine Joé is well informed about the situation in Enstone .. but this type of agreement is généraly complex and need to be involved to have a realistic view of the the situation ..
        if Génii cancel the debts of Lotus due to the transaction with Quantum .. that’s ok for me .. I won’t create a systematic contradiction .. We will never finish the story ..

        PS: sorry for my poor English ..

  8. I have no doubt Joe, that your sources at Enstone are impeccable, as usual, but some of what you’re saying, does have a very hallow ring to it.

    It does not take 4 months or more to sort out compliance issues on movement of funds from other countries in the World. It would only take around 7 to 10 days at the very most to sort out this problem. I should know, as I have more than 30 years experience in the City of London, dealing with these sorts of issues. Any major Bank – Solicitor or Accounting firm has the software to see if they comply via the Money Laundering Act of 2007/ 2011 & 2012. Therefore I think someone at Enstone is been extremely economical with the truth about the delay.

    It is well known that Genii have been putting in around $20M a year, and that this is in a form of loans to the team. Hence one of the reasons there is such a high debt level. They can either take a big haircut on the loans they have given to keep the team afloat, or exchange them for shares (Equity) in the team. I therefore gather the loans are been paid off.

    There is still the question mark over the $30M loan from Proton, which is secured by a floating charge over all the assets (Fixtures & fitting – equipment) at Enstone. Has or is this been paid off. Your claiming that all Debt is been paid off, therefore one assumes that Proton are getting there loan repaid in full. (Still listed on the company’s books at Companies House)

    It is easy to find, but Enstone have said 3 times, that Kimi salary was late, but now up to date. This has been repeated 3 times from statements out of Enstone. Yet Kimi, said the reason, or one of the reason for his move was that he hadn’t been paid his salary. So was he not paid the retainer and the bonus, or just the bonus element of it, which a lot of media outlets hinted to? Yet Kimi said salary. Therefore one gathers he had not been paid full stop. Plus Enstone did not come back and counter what he said. They in fact gave no reply. So the previous statements about his salary been late, but been paid, again appear to be a little economical on the truth side of things.

    We have of course heard & read about a London Property person buying into the team, and been offer a board seat. Nothing has been heard since; therefore we assume it never happen. Then why announce it?

    I really, really do hope that Enstone is been truthful about this investment. There are a lot of extremely talent engineers at Enstone, and yes Bernie’s money from this year’s placement in the Constructors points and last year will come in very handy for the 2014 car – season.

  9. Thank you Joe. Great stuff! High on the job list, I hope, is getting rid of the black and gold. I didn’t like it for a racing car first time round, courtesy Chunky.

    Very clunkily executed on the Enstone car.

    With the wiff of Flav gone from F1, I’d love to see bleu et jaune back for this team, notwithstanding French Middle Managementitis.

  10. Hi Joe,
    sort of related – what are your thoughts as to the technical side of the team? Haven’t they had a few key technical people leave during the year? Do they still retain sufficient engineering talent (in your view) to produce cars that will competitive into 2014 and beyond?

    Julian F

  11. Hi Joe,
    There are some rumours in The Netherlands that the father-in-law of Giedo van der Garde (billionaire Marcel Boekhoorn) will buy Toto Wolf’s shares (16%) of the Williams F1 team, and will put Van der Garde in one of the Williams seats. Do you have some knowledge of is this story toatal bull….

    1. I am not sure that Wolff is at liberty to sell the shares willy-nilly. I would guess that FW has first call on them. If Mr Boekhoorn is willing to buy the shares that is fine, but he will still need to provide massive sponsorship to get Giedo into one of the cars. I don’t see that happening.

  12. Does Eric Boulier have any shares in the Lotus F1 team? F1 tends not to shift it’s team principles in the same way football team hire and fire managers, but I can see him making a move alongside Kimi and Allison at Ferrari,

  13. Off topic but Joe,

    Do you have any insight as to what lead to key personnel defecting from Red Bull to Mclaren? Presumably megabucks from Honda will be an influencing factor, could Newey follow his team?

      1. Hehe,

        I guess it’s a question of motivation. Is the technical challenge of the new regulations enough to keep Newey motivated in his role for another 3 years, or does he need more?

        Do men like Adrian care about the legacy they leave? in which case there could be motivation to attempt to bringing success back to Mclaren.

        He may want to move toward a team principle role, or look toward taking shares in a team. Then again he may simply choose to enjoy the life Red Bull facilitates for as long as Red Bull are on the grid.

  14. Way off topic, Joe, but I’ve been wondering about the lack of Bernie quotes around the media lately. Usually (as far as I recall) he pops up pretty frequently talking about the latest happenings, championship positions, driver movements, general gossip etc. – not just race deals. Especially with the various driver and personnel exchanges and the championship almost settled I would have expected to see his opinion on matters being a bit more evident.

    Has he been unusually quiet, missing from races or are some journalists just bored with asking him questions and/or reporting his comments??

      1. This going back to the “How wonderful is Bernie for Dodging taxes” article that went down like a lead balloon on Jupiter??

  15. I heard that one F1 team torpedoed Lotus’ deal with some big American sponsor, a deal which apparently was “almost done”. Personally i think its about Honeywell but thats just my armchair hunch. Anyway, can you shed some light on that, Joe?

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