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Despite terminating its title sponsorship deal with Group Lotus, Lotus is committed to keeping its name in Formula 1 for the imminent feature. Confused? You should be.
Group Lotus was recently sold by Proton to Malaysian automotive corporation DRB-Hicom, causing Lotus F1′s team owner Genii Capital to end its formal relationship with Lotus. Just a week ago, we reported that Proton might be interested in acquiring Team Lotus F1, but that appears to be off the table now.
Despite the end of the Group Lotus sponsorship, Genii owner Gerard Lopez remains committed to the Lotus name. Lopez has recently agreed to a deal for title sponsorship on the F1 team, something he originally put together back in 2010, but that has been canceled and Proton’s option to buy 50 percent of the team has also been removed.
“We are happy to carry the Lotus name as we believe it is a good name for F1,” Lopez explained in a recent interview with Autosport. “We funded the team last year and the year before for whatever delta was missing. We would prefer to have sponsors up to the full amount – but if we have to fund it then we will fund it.”
Sponsorship deals that Genii had secured included Unilever and Microsoft, two companies that were arguably game changers in F1. Lopez also elaborated that buying Group Lotus isn’t entirely out of the question yet, but the organization would like to know what the new owners plan on doing with it.
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.
What season of F1 would be complete without the off-track drama? The complex battle between racing teams Group Lotus and Team Lotus rages on, indicating that the previous ruling for the rights to the Lotus name didn’t end the dispute yet.
Turns out, the high court judge had given Group Lotus the go-ahead to use the Lotus roundel, the “Lotus” name, and the retro-tastic black-and-gold livery. But it hadn’t entirely ruled out Team Lotus’s involvement in the sport, and parent company 1Malaysia Racing Team can still use the name and logo “Team Lotus.” This, for Group Lotus CEO Dany Bahar, is a problem.
And as such, he is planning to appeal the ruling and eliminate the confusion: “it is inevitable that the similarity of the names Lotus and Team Lotus will cause confusion not only amongst F1 supporters and the wider public,” he said, “but also amongst F1 commentators who use the word ‘Lotus’ interchangeably for both teams.”
We hope this plays out with a clear winner on top, because what’s the plural of Lotus, anyway? Loti? Lotusesses?
What’s Swedish automaker Saab worth? According to some reports, just $1.
Recent rumors have suggested that a partnership between Genii Capital, Formula One boss Bernie Ecclestone and Swedish businessman Lars Carlstrom will offer General Motors one hundred shinny pennies or the loss-making Swedish automaker, saving GM the cost of shutting it down. GM has already hired AlixPartners as a wind-down firm, but the cost of shuttering Saab could be as high as $145 million.
The well-backed group hopes to convince GM that it has a long term business plan for Saab.
And while gaining a dollar versus spending $145 million might seem like a practical solution, there are more factors involved as GM will most likely generate a significant amount of cash from the liquidation of Saab. On top of this, there’s a lot on the line for GM, with plenty of R&D spent developing the new 9-5 model. And while GM wants Saab on its feet, an overly competitive Saab using GM’s technology might create problems for America’s largest automaker down the road.
GM has repeatedly said it will shut down Saab but continues to leave the door open should any enticing offers arise.
But... GM still open to offers
It’s been said several times before, but GM Chairman and CEO Ed Whitacre today told reporters that the company is shutting down its Swedish Saab unit. “We’re closing down Saab,” he said. “We’re winding it down.”
Recently GM hired on wind-down firm AlixPartners, but continued to say that it was evaluating proposals from several interested parties.
Whitacre today said that so far none of the proposals, which include bids by Dutch exotic car maker Spyker and investment company Genii Capital, have been any better than closing Saab.
Product boss Bob Lutz, notorious for producing quotable phrases did so again today, telling Automotive News that, “For years GM has been procrastinating when it comes to Saab. I’m glad to see that for once GM is sticking with a decision to wind something down.”
Over the 20 years that Saab has been owned by GM, not once did it turn a profit.
The wind-down will begin, however, Whitacre said GM continues to keep its eyes and ears open should a viable proposal be put in front of them. Today, Swedish newspaper Dagens Industri reported the Genii, backed by Formula One billionaire Bernie Ecclestone, will have financing arranged for a cash bit shortly.
[Source: Automotive News]
The future of Saab just became a little more certain today. Or did it?
General Motors has released in a statement that it has hired on AlixPartners to oversea the wind-down of its loss-making Saab unit. In other words, GM is planning to close the doors on the Swedish automaker, sending the company into liquidation and the employees to the soup kitchen.
But hold on… GM also announced, in the same statement, that it has received several proposals by companies looking to purchase Saab and that it is, “continuing to evaluate these proposals.”
Yesterday GM delayed a board meeting that was to decide the fate of Saab, with rumors that it had given until today to get clear proposals from the two main interested parties: Dutch exotic car maker Spyker and and a newly interested party, Genni Capital.
Recent reports have tied Formula One boss Bernie Ecclestone to the Genni Capital bid.
GM has been trying to off-load Saab since it emerged from bankruptcy, with previous efforts, including a sale to Swedish supercar maker Koenigsegg, having fallen through.
Official GM press release after the jump:
General Motors has reportedly delayed a board meeting that was to decide the fate of its loss-making Saab unit today, as a new bidder has emerged onto the scene. GM had already postponed Saab’s fate by dropping a self-imposed December 31st deadline in favor of a January 7th one. Now it is giving Spyker, as well as the new bidder, Genii Capital, one more day.
Genii Capital, a private equity firm, recently made headlines when it took a majority stake in Renault’s Formula One team. The asset-rich private-equity firm is reportedly preparing a cash offer, in direct response to GM CEO Ed Whitacre’s comments that interested parties had best be able to back up their offers with cash. ““It’s real easy,” he said, “show up with the money and you can have it.”
Genii spokesman Lars Carlstroem said that, “Saab is a strong brand on the same level as Porsche and BMW.” He also outlined a plan to restore Saab to profitability. It would work much in the way that the original Koenigsegg (a previous bidder) plan would, selling fewer, more premium vehicles at a high price point.
If a deal does go through tomorrow (with either Spyker or Genii), then Saab is poised to re-start production as early as January 11th. If not, it is expected that GM will begin winding down the Saab division, eliminating thousands of jobs in Sweden and in the U.S., where Saab has over 200 dealerships.