Everybody knows that F1 is the preserve of the mega-rich, right? F1 teams are multi-million pound enterprises and rarely change hands for anything other than triple rollover lottery winnings, right? Not so fast! In a deal sewn up just before turkeys were hitting ovens around the globe, Renault reacquired the Lotus F1 team for the 2016 for the princely sum of £1.
The silly season silly money has a serious reason behind it. The floundering Lotus F1 team were desperate to find new funding streams and someone who would be prepared and able to pay off debts. As a result, the deal was closed by the payment of a nominal fee.
In spite of the straightforward payment plan, the details of the deal are nothing if not complicated. Before the buyout, the F1 team was reported to owe in the region of £200 million to its debtors. Renault has assumed this debt, but it will not be liable for a reported £150 million which was loaned to Lotus by its stakeholders.
So far, so not mind-bendingly complicated? Here goes. The team’s history dates back to 1981, when it was founded as Toleman Motorsport. In 1985, the high-street fashion chain Benetton bought out Toleman. In turn Benetton sold the team to Renault in 2000. Between 2000 and 2010, Renault claimed two Drivers’ Championships, but in 2010 the company took a back seat in the team. Control began gradually transferring to Genii Capital, which had run the team since the name change to Lotus.
However, Genii has been unable to run a competitive team and now has sold it back to Renault. The details are more complicated to unpick than completing a Rubik’s Cube blindfolded. Genii and its subsidiary Gravity Motorsports had to buy back over six million shares before selling the team to Renault. These were added to its own 60 million shares, before all were transferred to Gringy (UK) Ltd for the sum of £1. Just to add a further layer to the entrepreneurial mille feuille, Gringy effectively owned the team when it was under the Benetton name.
As a wholly owned subsidiary of Renault, Gringy takes immediate ownership of the F1 team with a 90% stake. The remaining 10% remains with previous controlling interest, Genii and other investors. The new Renault F1 team, in common with Ferrari and Mercedes, will develop its own powertrains. More details are bound to emerge as the New Year grows older. Capital Karts can’t keep up!