For the first two races of the 2012 Formula 1 season, Team Lotus has received a mixed bag of results. Formula 1 World Champion Kimi Raikkonen finished both races in the points despite mediocre qualifying. Meanwhile, GP2 champion Romain Grosjean displayed rapid pace during qualifying but suffered a DNF for both races.
Such is the mix of fortunes in motorsports. A long and illustrious name in Formula 1, the Lotus F1 team withdrew from the series in 1994 and only returned in 2010. However, while Syed Zainal Abidin Tahir, managing director of Lotus parent company Proton, and Lotus CEO Dany Bahar are both appointed team board members, ownership of the F1 team in fact belongs to Luxembourg-based private equity firm Genii Capital. Now, between Lotus and Genii Capital, the future of the team is up for grabs.
A precarious situation, Genii Capital may even consider to buy out Lotus itself if the sports car manufacturer struggles to break through in its production car operations and continues to suffer heavy losses. To note, Lotus made a £21.4 million pre-tax loss last year while Proton’s profits have begun to show a trend of decline. In January, the Malaysian government sold its 43% controlling stake of Proton to DRB-Hicom, a Malaysian Corporation involved in the automotive manufacturing, assembly and distribution industry. Genii Capital chairman Gerard Lopez has previously exchanged with DRB-Hicom on the possibilities of selling Lotus. Lopez said,”If there is a way that we think the company can be bought and run successfully, then of course we would be interested.”
Despite the financial obstacles, Lotus and Proton remain true to their racing commitments. Lotus spent approximately £25m annually to sponsor the F1 team that bears its name and parent company Proton also supported the team an estimated £34m to satisfy debt obligations concerning secured loans with Renault and bankrupt Lithuanian bank AB Snoras. Also, more than having members on the team board, a signed call option agreement with Genii on February 3rd entitles Proton the right to purchase a 50 percent stake in the team to become majority shareholders. Proton has yet to execute the option but this may only be a matter of time.
We will learn more as the negotiations progress and as the Formula 1 season unfolds.