Brought to you by TJ13 contributor Tourdog and Editor in Chief Andrew Huntley-Jacobs
Lotus’s relative financial position is well known, though less talked about over recent months. Pastor Maldonado brings a large chunk of change to the table, but he costs a lot more than the average driver in terms of damage to equipment, so his benefits are quickly levelled by his detriments. The fact that Joylen Palmer has run more FP1 sessions in 2015 than Romain Grosjean, reveals a little more about the Enstone team’s need for extra cash too.
The Red Bull/Renault situation however, is talked about much in F1 circles, in the way that an alien invasion would be in the world’s media.. This has driven the speculation meter into Ludicris Mode, and now we have talk about Aston buying Red Bull, or maybe Force India.
The there is the rumour that just won’t go away, that Renault will return to their lost love and buy back the Enstone based team.
Yesterday the news broke that the Xtrac Corporation have filed a winding up petition with the ‘Companies Court’, Adam Cooper reports. Xtrac supply a number of internal parts for the Lotus gearbox and have clearly not been paid for a considerable time. These petitions are seen as a last resort by a creditor to force their customer to pay long overdue bills.
A spokesperson for Xtrac commented, “The judge has adjourned the hearing for two weeks. This is in order to allow further dialogue during which we will continue to discuss all the options for resolution with Lotus F1.
“Throughout the past 15 months, Xtrac has manufactured a significant quantity of parts in good faith to ensure the cars can keep running. We have enjoyed a long standing relationship with Lotus F1 and its management, and we hope to resume this once the now significant debt has been reduced and a positive outcome agreed.”
Any work currently required from Xtrac by Lotus will be in all likelihood be transacted on a cash up front only basis.
To further increase the pressure on Lotus, Pastor Maldonado’s DNF at Silverstone will require a gearbox change for the next race in Hungary. This would be Lotus’s 11th complete gearbox this season. Add to this the race by race and day by day gearbox component replacements the teams make during an F1 weekend under the FIA reliability exemption clause, and TJ13 has been led to believe the total cost for nine races will be in the millions of pounds.
Lotus CEO Matthew Carter attempted to play down the current legal woes. “We’ve talked about it a lot. The smaller teams have talked about it, and the issues at Marussia and Caterham haven’t helped. There’s a hearing – in fact I think the hearing’s been adjourned – but it’s just usual creditors, it’s part of the process, it’s just where we are, it’s life.
“We’re in a fairly good position in that we don’t owe – other than our suppliers which is normal run of the mill – we don’t actually owe a bank any money, we don’t have any loans outstanding or anything, everything that we owe is to the shareholders.
“It’s not as if there’s anyone out there who’s going to do anything silly. As far as what we can portray to our sponsors, we’re fine, we are where we are.
“A resolution had already been found, that’s why the process has been adjourned. Things are being dealt with.”
However, had a resolution actually been agreed between Lotus and Xtrac, then the court hearing would not have been adjourned – but de-listed. The matter will be heard again on July 20th.
F1 fans who followed the mid-field teams’ rebellion against Ecclestone in 2014, will remember that Gerard Lopex of Genii was an ever present figure at the Grand Prix events last year. This year Mr. Lopez has been conspicuous by his absence.
Matthew CArter was asked about this during the Friday FIA press conference in Silverstone and he replied: “I’m not sure where you missed him, but he’s certainly been to two if not three races this season. He certainly was in Spain on race day”.
Hardly a convincing response.
Perhaps two weeks is all Lotus need until the next instalment of their 2014 prize money arrives from Bernie, though if Xtrac want a significant portion of the accumulated debt paying down, this may leave little in the kitty for paying the employee’s wages.
The problem with winding up orders is all the suppliers become nervous, and begin to line up with their account statements in hand demanding more than a months payment. This will crush Lotus’ cash flow in a matter of days and the hole below the financial waterline will quickly sink the ship.
TJ13 believes Red Bull are to make an announcement in the very near future regarding their long term F1 engine supply arrangements – and it will not be an extension of the existing contract with Renault beyond the existing 2016 deadline.
Renault’s historic relationship with Enstone is well known and the price tag to save this multiple world championship winning F1 operation will be significantly lower than the $300m Dietrich Mateschitz offered the French company to buy Toro Rosso.