Lotus F1 hit by winding up petition from unpaid suppliers

The Lotus F1 team is facing a potential legal crisis in the wake of a winding-up petition from a group of creditors that includes gearbox component supplier Xtrac.

A hearing at Companies Court today was adjourned for two weeks in order to give the parties further time to talk.

If there is no resolution the case could lead to Lotus going into administration.

The judge has adjourned the hearing for two weeks,” an Xtrac spokesman told this writer. “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.”

Lotus CEO Matthew Carter has downplayed the possible consequences, suggesting that the situation is simply related to suppliers being keen to get paid promptly after problems at other teams last year.

We’ve talked about it a lot,” he told this writer. “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.”

Carter denied that the situation might be disconcerting for sponsors.

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 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.”

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No offer from Renault, says Lotus F1 boss

Lotus F1 CEO Matthew Carter insists that Renault has not yet made a formal offer to acquire the team, despite suggestions in the paddock that a deal is almost done.

In recent months Renault talked to all the midfield teams about a possible takeover. However, the French company’s history with Enstone outfit makes Lotus an obvious choice, if the financial issues surrounding the team can be addressed.

Toro Rosso also remains a candidate, according to some sources, and it comes without the associated level of debt.

As CEO I know nothing of any offers, bids or anything that’s going on,” Carter told this writer. “I know that Renault are looking at their involvement in F1, but whether they get more involved or less involved, I don’t know. I think they’ve got issues they need to resolve with their engine at the moment, and they probably need to concentrate on that.

We know that they looked at the usual candidates. We probably are the best fit for them. But as I said there’s been no offers, no further interest. I think they need to concentrate on their engine at the moment.”

Carter says team owner Genii does not want to sell.

The shareholders have repeatedly told me that it’s not for sale. They wouldn’t want to sell it at this point. In terms of where we are as a team and as a business, we’re heading in the right direction. When I came in 18 months ago it was always a five-year plan to sort things out, sort the finances out. We put the Mercedes engine in, and it’s all about trying to move up the constructors’ table. I think if they did do something now I think they’d kick themselves that they didn’t see it through.”

One added complication is that Lotus is committed to Mercedes: “We’ve got a long term contract with Mercedes until 2020, from my point of view as the CEO I wouldn’t want to change that engine, so that’s where we are.”

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Could Ecclestone and Mackenzie lead buyout of CVC’s F1 stake?

Bernie Ecclestone has hinted that he might be part of a consortium that could take over CVC’s 35% shareholding of the F1 business.

Ecclestone indicated that CVC has faced a deadline to sell its stake, and has extended it twice. The business is understood to be valued at around $9bn, making the CVC share worth approximately $3bn. 

It’s like all hedge funds,” he told this writer. “They invest people’s money for a certain period. It doesn’t matter how good they do, they have to give it back. Maybe they re-invest again, maybe they don’t, I don’t know. They’re past their sell-off date. They have extended it a couple of times.”

He then suggested that even if CVC left the sport its chairman Donald Mackenzie could remain an investor in a personal capacity, in conjunction with Bernie himself and other investors – in what could be termed a management buyout.

Donald Mackenzie doesn’t want to sell, as simple as that. He loves F1, he loves the business, he doesn’t want to sell. He may have to sell his shares. Whether he’ll invest himself, maybe with me, separately, we’ll have to wait and see.”

Asked if he was interested in buying F1 back, Bernie said: “We’re talking.”

Curiously Mackenzie himself said that there was no deadline for CVC as the original investment had been repaid, and thus “the pressure is off.” He added: “We don’t want to sell.”

Meanwhile Ecclestone has acknowledged that a joint venture involving Qatar and US firm RSE Ventures is among potential buyers of CVC’s share of the F1 business. He considers RSE’s billionaire boss Stephen Ross as a serious player.

Lots of people have made approaches. He’s a proper guy, he’s a sporting guy, from a business point of view.”

Intriguingly the head of the Qatari motor sport federation said this week that he was close to finalising a deal to have a Grand Prix, despite Bahrain and Abu Dhabi having an agreement with Ecclestone that would prevent a third race being launched in the Middle East. Ecclestone acknowledge that the situation could change if Qatar invested in F1.

I think if they own the company there’s a very good chance of that happening.”

He added: “Or get the people from Bahrain and Abu Dhabi to agree. Then they wouldn’t have to buy the company.”

Dieter Hahn of German sports marketing media group Constantin Medien, who was involved in an expensive legal fight with Ecclestone, has also been connected to the RSE/Qatar bid. Ecclestone doesn’t see their history as an issue.

I can work with anybody. It doesn’t make any difference to me. He lost the case, so why should I be upset with him? If he was here now, we’d probably have dinner tonight.”

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Mercedes not discussing engine deal with Red Bull, says Lauda

Niki Lauda has denied suggestions that Aston Martin could help Red Bull Racing secure a Mercedes engine supply for 2016.

Historically Red Bull and Mercedes do not work together, and hitherto any kind of relationship looked impossible. However, Autocar has suggested that Aston Martin – which is 5% owned by Mercedes – could broker a deal, and that the RBR cars would carry Aston branding.

Aston CEO Andy Palmer and director of marketing and communications Simon Sproule were previously involved in Infiniti’s sponsorship of RBR, and Palmer also contributed to road car co-operation deal between Renault/Nissan and Mercedes. There is also an engine and software supply relationship between Aston and Mercedes, while there are close links between David Richards and Christian Horner.

There’s not even a discussion,” Lauda told this writer. “No discussion at all. I haven’t heard anything from them and we never talked about it. I have breakfast every morning with Helmut [Marko] so I should know.

We never thought about it because we have four teams running our engines, so we don’t even have capacity.”

Asked if a fourth supply might be freed up if Lotus switches back to Renault next year he said: “Who knows? I’ve no idea. We have contracts with all of them. We cannot do more than what we have, and that’s it.”

Meanwhile Lauda acknowledged that there was personal animosity between Red Bull boss Dietrich Mateschitz and Mercedes that made any co-operation unlikely.

It starts with Mateschitz, Mateschitz had, for whatever reason in the past, I don’t know what. I don’t know the reasons, to be honest.”

Meanwhile another Mercedes source joked: “They have been asking since February 2014 – they ring up every week! If you see how they’ve treated Renault they are not a good partner to have…”

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“Wild card” compound selection coming in 2016

Pirelli has welcomed the F1 Strategy Group’s move to free up the tyre regulations from 2016.

While the details have yet to be finalised, a move is planned towards ‘wild cards’ – allowing teams to have some control over their choice of tyres at certain events.

The FIA would only say “increased freedom of choice for tyre compounds has been confirmed and the modalities are being finalised with Pirelli for 2016.”

However the intention is that at selected races teams will have a free choice of compounds, while at tracks where there is a question mark over safety – such as Monza – Pirelli will dictate the choice. For example the teams may have four wild cards to play at any four of 15 races where Pirelli allows a free choice. Those choices will be made well in advance, for logistical reasons. This particular idea was put forward by Red Bull Racing.

“It’s around that area,” Pirelli boss Paul Hembery told this writer. “The idea is to have certain wild card events and certain block-out events where it just wouldn’t be advisable due to safety reasons.

I don’t think we’ve got the final situation yet, but we’re getting closer to a solution that the teams are looking for, gives the sport what it needs, and allows us to maintain a level of safety on the choices that are made.”

Hembery said different ideas are still in play: “There are a couple of proposals being refined. A lot of it has been chopped and changed and consolidated. We’ve got a bit of time yet, it probably needs to be September time before we refine it. A couple of new ideas have come out in the last 24 hours that are even more interesting.

“But it’s all going in the same direction, to give the idea of some choice, and to allow flexibility for the teams while giving a guarantee that the race can be run because they’ve got a product that can do the race distance.”

As part of the change Pirelli wants to have an extra tyre in the range, known variously as an ‘ultra soft’ or ‘super super soft.’

“One little step next year might be a super super soft,’ technically speaking a supersoft for the Monaco or possibly Singapore that goes one step further than what we have at the moment.”

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Boullier thanks Strategy Group for extra Honda engine

McLaren boss Eric Boullier has welcomed the F1 Strategy Group’s decision to grant Honda an extra “free” fifth engine for 2015.

The rule change has been brought in on the basis that it applies to all future new entrants in their first seasons, and it has been applied retrospectively to Honda “for the sake of fairness,” according to the FIA.

Last year all drivers had five engines, and the figure was reduced to four on the basis that the manufacturers had gained a year of experience and thus reliability was improved.

While the McLaren drivers are already on their fifth or even sixth engine elements, the next ones can be taken without penalty.

“I’m happy that the F1 community has been giving a gesture of goodwill,” Boullier told this writer. “The problem was there was never any process about if somebody wanted to enter the sport after January 1 2014.”

The move is also a bonus for the likes of VW/Audi, who might be discouraged from entering by the sort of problems that Honda has experienced.

“Obviously F1 needs people to come from outside. It was a good Strategy Group meeting, there was a lot of positive discussion. There is more to come actually, which we can’t make public now, but it’s good. F1 needs to think not only about ourselves, but about the world.”

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FIA to drop extra race penalties for untaken grid places

Drivers will henceforth no longer get extra race penalties for untaken power unit grid penalties, the F1 Strategy Group has decided.

For this season the rules changes so that untaken places can generate five and 10 second time penalties, drive through penalties and 10 second stop and go penalties for drivers who have in any case already been demoted to the back of the grid.

That has proved hugely unpopular with the public, so from now on the intention is that the severest penalty will be a back of the grid start.

There was some talk of the change being introduced for this weekend’s British GP, if it could be fast-tracked through. However FIA sources have confirmed that the change has to go through the correct procedures, so it won’t happen before Hungary.

“That’s a sensible outcome,” Christian Horner told this writer. “Theoretically I don’t see why it can’t be done for this weekend – it could be done on a fax vote for this weekend, if not, worst case is Hungary. I think generally it was a constructive meeting, some positive ideas coming out of it.”

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