While Renault announced their acquisition of Lotus F1 last week, it is an interesting situation from a debt perspective. Perhaps they do things differently in Europe or maybe the reasonable ability to keep the team as a going concern necessitated the acquisition of assets and debt but regardless, it seems Renault just bought themselves a heaping helping of debt that has to be paid off soon. Lotus F1’s CEO Mathew Carter said:
“It’s the 16th for the SPA (share purchase agreement) and they (Renault) are agreeing to pay all the creditors by the 31st,” he said.
“So I guess when we come back on the 21st it will be to ensure that the SPA has been signed.
“It’s been an interesting process all the way through but we are where we are,”
In the US, often times an acquisition is an asset-only affair leaving debt to be managed by the previous owner but in this case, it seems the creditors are essential to Renault’s going-forward plan and need to be taken care of in order to keep production moving along for their 2016 program.
Gerard Lopez of Genii Capital managed to get the operation to the goal line with Renault and even Mr. Bernie Ecclestone helping to keep the team in the paddock. It’s unclear on the post-acquisition complexion of the team as to if Carter or Lopez will remain but a comment from the former says that the drivers will remain as announced as the contracts were agreed with by Renault. He does, however, leave the door open:
“As we all know, contracts can be broken if parties particularly want to, but they have both got contracts and therefore I think in January it’s just going to be an announcement of everything,” he said.
“I think there’s going to be team name, driver lineups, colours of car or sponsors etc.
“Pastor and his funds are part and parcel of Renault’s plans certainly for the next 12 months. I think the two drivers will be as we think,”
Perhaps those Pastor funds are important to paying off Lotus F1 debt after all? That would be a reason to keep the Venezuelan around. It’s the Pastor debt relief fund. Although I know what you’re saying…”where’s Carmen in all this acquisition talk”? Sorry, can’t help you there, no one knows.
Regardless of drivers, I will be interested in seeing who their title sponsor is and what color the car is when revealed. There was some talk of Alain Prost being involved or possibly one of the drivers being jettisoned for Jean-Eric Vergne now that Romain Grosjean is leaving for Haas F1. If I’m honest, I bet Grosjean is really bummed he couldn’t stay on because Renault have a positive history in F1 of winning and putting serious resources behind their operation. It would have been terrific to see him in the Renault…in French Racing Blue.
Hat Tip: Reuters