How Genii sold Lotus to Renault for £1

Renault paid just £1 to take over Lotus F1 when the deal was finalised just before Christmas, an indication of just how keen the previous owners were to find new funding and an investor who could pay off past debts.

Company accounts also confirm that Genii Capital and its affiliate Gravity Motorsports have retained 10% ownership of the restructured organisation, and waived £98.2m of shareholder loans to the team.

The purchase was a complicated arrangement that involved Genii first purchasing 6,744,444 shares from Whiterock Alliance Ltd, to add to the 60,700,000 it already had. Having established full ownership of the share capital it then sold 90% to Grigny (UK) Ltd – the company that previously ran the F1 team in its Benetton and Renault days – while retaining the remaining 10%.

Grigny is a subsidiary of Renault, and in fact its immediate owner is Renault Developpement Industriel et Commercial, or RDIC. Grigny has been in existence since 1977, and between December 1979 and March 2000 it was known as Benetton (UK) Ltd, the start even pre-dating the fashion company’s involvement in F1. When Renault acquired the Benetton F1 team the French manufacturer continued to own it under the Grigny name until it was passed on to Genii.

In the V8 era Renault used Grigny for leasing KERS systems to its customer teams, generating some £7m in 2013. That changed in 2014 when energy recovery became an integral part of the power unit, and Grigny earned just £432,000 from “supplying engineering and technical services to Renault Sport F1,” according to its most recent accounts.

Having almost been dormant over the past year Grigny is now once again in frontline use by Renault as the immediate owner of the F1 team.

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Sainz expects rivals to progress in 2016

Carlos Sainz Jr says he was relieved that Scuderia Toro Rosso was finally able to confirm its Ferrari deal – but the Spaniard is concerned that the team could be left behind as others develop their newer engines over the course of the season.

Sainz says that at one stage he was worried about the team’s future after doubts were expressed about Red Bull’s commitment to F1.

“They were very small thoughts,” he told this writer. “Honestly I always had a lot of trust, a lot of belief, that the thing was going to be solved really soon – even though it wasn’t very soon, but soon enough!

“I am relieved that now we have a solid platform to work on next year. I think it will be a step forward. Having a full Italian team will also help, I think there will be good relationships – from what I know they really enjoyed the time when Ferrari was there. I think everything is very positive for next year.”

The downside is that STR’s 2015-spec engines are likely to be unchanged over the course of the season, while all the other manufacturers will be making steps as they use their tokens. Sainz says that the team knows it has to make the most of the early races.

“This is the main thing, that probably the first half of the season will be the most important for us, when we need to maximise what we have. The second half will be a bit more difficult, obviously. Especially after looking at this year, there was a lot of in-season development.

“Also we noticed with Renault that we had the same power for the full season. Toro Rosso at the beginning of the season was up there, and then little by little we went backwards. So it will be all about maximising the first half, I think.”

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Christian Horner: “It is never good to conduct your business in public…”

Red Bull boss Christian Horner says he has no regrets about criticising Renault this season – and admits that in part he was trying to send a message to the French company’s board and its CEO Carlos Ghosn.

In effect Horner, who has harboured doubts about Renault’s commitment, wanted to give the management a wake-up call.

The Renault board are quite distant from what is going on,” said Horner when asked by this writer. “It is not like Dieter Zetsche, who attends quite a few races, or Sergio Marchionne, and so I guess part of being vocal was also to get those messages back to the Renault board, that there are some issues here, and they need to be resolved.

I think that things were said ultimately on both sides – of course it is never good to conduct your business in public, but it was really born out of frustration more than anything else.”

However Horner insisted that he had no regrets about going public, and says it didn’t have a negative impact: “It is very easy for others to pick up and use whatever excuse is convenient. What you have to remember is, this is a competitive business. As far as I am concerned, I have only ever told you the truth.

When I have been asked a question, I have given you an answer, and if you look at actually what I have said, I don’t think there is anything particularly unfair in the comments that have been made. I think inevitably it’s been born out of frustration, comments that either Dietrich, or Adrian, or Helmut have made.”

Horner admits to being frustrated when Renault opted not to accept technical input from Ilmor’s Mario Illien that had been arranged by Red Bull, a decision that has now been reversed for 2016.

Renault went through some management changes towards the end of last year, and there was an awful lot of talk going on. We introduced Mario Illien to them, there was resistance to use Mario initially, we created an engine group to support, there was not the smoothest of relationships between Milton Keynes and Viry, and out of that, obviously grew frustration.

I think there was always a reluctance to fully embrace Red Bull as a technical partner, and there was a difference of opinion technically on where the weaknesses of the engine were. We couldn’t influence the technical direction of the development. 

Mario developed a concept for Renault, and Renault in parallel ran their own project, and the outcome of which was the D-spec. And I never felt that Renault fully embraced the technical capability and simulation capability that we tried to offer. It was very clear early on that Renault weren’t happy being just a supplier. From the back end of last year they have been looking at becoming an entrant again.”

Horner denies that Red Bull pushed Renault too hard: “I don’t think so. I think that they are quite an established and conservative organisation, and of course our DNA is that we want to push, we want to get on, we want to make progress.

And obviously a lot of promises were made over the last quarter of the year, and the closed season of 2014 into 2015, so inevitably expectation rose. And it was frustrating to see us further away, and in fact behind where we finished the season in 2014, going into the beginning of 2015.”

He admits that Renault’s inherently conservative approach has held the company back.

I think in some respects, it possibly has. It is good to hear that they are looking at a bit of a restructure.”

Meanwhile he says that another side effect of Renault’s winter problems was that issues with the chassis were not immediately apparent, although later the team was able to get on top of them.

I think with regard to the engine, we were running old specification engines through the winter, and we had quite a lot of issues, reliability and so on, and particularly driveability, that was masking quite a lot of the chassis issues.

The front wing changes and nose changes over the winter actually seemed to affect us more than others, but they were a little bit masked early on by the major issues that we were having with the driveability. It was only once that started to improve that we could see – hang on, we’ve got some things that need tidying up, which the team quickly got on top of.”

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No decision from Aston Martin on F1 plans

Aston Martin has postponed a final decision about a future involvement in Formula 1 until at least January, following months of discussions with interested teams.

After a false start with Red Bull and further discussions with Williams, Force India had emerged as the most likely partner. The latter’s boss Vijay Mallya has made it clear that a deal with a premium brand like Aston Martin would be a huge boost to the team.

There have been suggestions that the board has already decided against an F1 involvement. However, Aston‘s director of marketing and communications Simon Sproule says that the matter is still under discussion.

We have not made any decision,” Sproule told this writer. “And we are not likely to make any final decision about either F1 or the broader motor sport strategy until the New Year.

We also have to figure out what our path forward in sportscar racing is, and where we go with that. We are not looking at F1 in isolation.”

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Ferrari not involved in Hoyle spy case, says Mercedes

Mercedes has formally confirmed that Ferrari is not involved in the ongoing spy investigation into departing engineer Ben Hoyle.

When Mercedes launched legal action against Hoyle the company understood that he would be heading to Maranello. However, as previously reported the Italian team denied that Hoyle would be joining.

In a website statement today Mercedes has sought to clarify the situation and stressed that Ferrari is not part of the story.

The statement said: “There are on-going internal investigations, regarding confidential information being removed from Mercedes by Mr Hoyle, in order to protect against potential damage to both Mercedes and any company which could potentially receive such information.

Mercedes will continue with these investigations until it can conclude that all the confidential information is recovered, which is anticipated to take a further 2-4 months.”

Regarding Ferrari’s involvement the statement added: “The investigation has shown no reason to believe that information has been transferred to Ferrari, nor have any of the court documents made any allegation regarding any inappropriate conduct by Ferrari.

Mercedes will continue to protect its interests, including carrying on the legal proceedings against Mr Hoyle, and continue to protect against potential inappropriate transfer of confidential information within the motorsport industry.”

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Red Bull to look beyond Infiniti

Red Bull Racing has confirmed the expected split with title sponsor Infiniti from next season, despite the two parties having a contract that extended into 2016.

It was always unlikely that the Renault-owned brand would continue with RBR given the takeover of Lotus F1, and the fact that under the revised engine supply deal Renault’s name is no longer attached to the Red Bull programme. Infiniti branding is expected to appear on the Lotus next year.

A team statement said: “Red Bull and Renault have reached a mutual and amicable agreement that will see the French car manufacturer continue to supply the team with engines for the 2016 Formula One season, and this new agreement does not cover any marketing activity for the Renault-Nissan Alliance.”

Infiniti first joined Red Bull in its second World Championship season in 2011, becoming title sponsor two years later.

We would like to say a big thank you to Infiniti for their contribution to the team since they joined us as a commercial partner in 2011,” said Christian Horner. “They became the title sponsor of the team in 2013 where Infiniti enjoyed greater visibility than any other manufacturer in the sport. We wish them all the best with their plans for the future.”

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Toro Rosso finally confirms Ferrari deal

Toro Rosso has finally officially confirmed that it will 2015 Ferrari engines next season.

Carlos Sainz and Max Verstappen have also been formally confirmed, although there was never any doubt about their positions.

The engine deal has been in place for some time but the team was not able to confirm until it knew that Red Bull Racing would be competing next season, as it was clear that the junior team would not continue on its own. Earlier this week the FIA World Motor Sport Council gave Ferrari permission to supply a “fourth team” with a year-old engine.

A statement said: “Scuderia Ferrari and Scuderia Toro Rosso have reached an agreement that will see the Faenza-based squad use the current Ferrari Power Unit in the 2016 Formula One Season. On-track testing will begin in February, 2016 at the Circuit de Catalunya in Spain.”

Toro Rosso boss Franz Tost said: “It’s great to be working with Ferrari again. We had a fruitful relationship in the past and I’m sure it won’t take long for us all to be working together very well again. It’s true that time will be very tight for us to be ready for the first test, but we have the right team of people for this and I’m confident that together we will achieve a competitive package for next year – bring on 2016!”.

Toro Rosso previously utilised Ferrari power from 2007 to 2013, before it was decided that both teams would be with Renault from the start of the new hybrid era in 2014.

The intriguing scenario is of course that the 2015 Ferrari will potentially be stronger than Red Bull’s upgraded 2016 TAG Heuer/Renault, although the latter could clearly improve during the season.

 

 

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Red Bull confirms Renault engine will be badged as TAG Heuer

Red Bull Racing has finally confirmed that its 2016 Renault engine will be badged as TAG Heuer.

The decision allows the French manufacturer to put its full support behind the works former Lotus team and allows both parties to distances themselves from this year’s troubled relationship.

In addition the works team will benefit from extra technical support from Ilmor which has been orchestrated by Red Bull.

In a statement the team said: “The new partnership, which represents a shift away from F1’s conventional supply systems, will see TAG Heuer take up naming rights of the team’s power unit, which will be supplied by Renault. The new car will be christened the Red Bull Racing-TAG Heuer RB12.”

TAG Heuer and Red Bull are two transcendent brands which have both a passion for racing and a drive to do things differently,” said Christian Horner. “And this unique collaboration is further evidence of that. TAG Heuer has been an icon in the world of Formula One for many years and we’re delighted that they’ve chosen to continue their association with the sport by teaming up with us.

Our shared values of innovation and a desire to stand out from the crowd make this one of the most exciting partnerships in F1. We are also pleased to see Renault confirm its long-term commitment to F1 and would like to thank them for their contribution to the team since 2007. Their technical partnership with Ilmor gives us confidence, and we look forward to the 2016 season.”

Jean-Claude Biver, CEO of TAG Heuer added: “Formula One is deeply-rooted in TAG Heuer’s DNA, and Red Bull Racing is a young, dynamic and driven team, which perfectly fits with our marketing strategy. It will give TAG Heuer great visibility and allow us to make our partnership exciting, different and innovative. Our motto #DontCrackUnderPressure will be the guiding principle behind all our actions with the support of the Red Bull Racing team and its highly contagious enthusiasm.”

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Ghosn finally commits Renault to Lotus deal

Renault has finally confirmed that it will stay in F1 next year and will return as a works effort with Lotus.

Negotiations have dragged on for months and reached a critical point over the Abu Dhabi weekend as a long-term deal – believed to be for nine years – was negotiated with Bernie Ecclestone and F1 owner CVC.

Renault had two options: to come back at 100 percent or leave,” said CEO Carlos Ghosn. “After a detailed study, I have decided that Renault will be in Formula 1, starting 2016. The final details supplied by F1’s main stakeholders gave us the confidence to accept this new challenge. Our ambition is to win–even if it will take some time.”

In a statement Renault made it clear that it was important to be a works effort: Following the September announcement of the signing of a Letter of Intent with Lotus F1 Team, teams at Renault continued to evaluate the possibility of a return to Formula 1. Particular attention was paid to competing successfully with its own team in a financially sound way starting in 2016.

As a full team, Renault will take maximum benefit from its victories. The payback as an engine supplier proved to be limited. The return on the investment necessitated by the new engine regulations and the return in terms of image were low.

Work continues on finalizing the terms of the acquisition of Lotus F1 Team in the shortest timeframe possible. The principal contracts were signed on December 3, 2015. Lotus F1 Team effectively stands out as the best partner. Renault and Lotus F1 Team have known each other for 15 years and were world champions together in 2005 and 2006.”

Renault says that it will gain a lot from its involvement: “Renault’s decision to continue its involvement in Formula 1 is confirmation that it sees motorsport as an essential part of the brand’s identity. Formula 1 is the ultimate symbol of the passion for automobiles. Passion defines Renault as expressed by its brand signature, ‘Passion for Life’.

In addition to attracting many customers, Formula 1 also fuels employee motivation. As the pinnacle of motor sport, Formula 1 demands technological and operational excellence. The championship serves as a showcase for the technological expertise that Renault dials into its products for the benefit of its customers.

“Formula 1 serves to promote awareness of the Renault brand and its image in all its markets across the world. Formula 1 is one of the sports that enjoys the most media coverage worldwide thanks to a following on five continents, particularly in emerging markets. It attracts 450 million television viewers annually and its scope for growth is enormous thanks to opportunities founded on new technologies, social networks, video games, etc. that have yet to be fully exploited.

“In January, we will provide more detailed information about Renault’s F1 programme ahead of the 2016 championship that begins next March.”

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Teams can split drivers on tyre choice in 2016, Pirelli confirms

Pirelli has issued more information about how the 2016 tyre rules will work after the FIA World Motor Sport Council approved the new system.

From next year there will be five compounds, with the purple-marked ultrasoft joining the range. Teams can choose three of the compounds for each race weekend, within certain guidelines.

The choices will be made to a deadline set by Pirelli – before the tyres are made and shipped – and the selections will only be made public two weeks before the race. Intriguingly drivers within teams can have different choices.

Pirelli explains the full rules as follows:

In consultation with the FIA, Pirelli will decide in advance which three compounds can be used at each race, and communicate this information to the teams.

The total number of sets that can be used during practice, qualifying and racing remains the same as it is currently: 13.

Pirelli will nominate two mandatory race sets for each car. Furthermore, one set of the softer compound will have to be kept for use in Q3 only.

The two mandatory sets chosen by Pirelli can be of two different compounds, from the three that have been nominated for the race weekend. These sets will obviously be identical for each team.

The remaining 10 sets can be chosen by each team, from the three compounds nominated for the race weekend.

The teams will make their choices within a deadline set by Pirelli. They will communicate their choices to the FIA, which will in turn tell Pirelli how many tyres to produce. The choices for each car will remain secret until 2 weeks before the race. If a team does not meet the deadline, the choice will be made by the FIA.

Once the choices for each car have been made, the FIA will continue to assign the tyres randomly via a barcode, as is the case currently.

The choices made by each team can vary for each of its cars: so each driver within a team can have a different allocation.

The tyres will be distinguished by different coloured markings on the sidewalls, as is currently the case.

Teams will still have to give back tyres according to a certain schedule, but they can decide which tyres to give back at the following times:

One set after the first 40 minutes of FP1

One set at the end of FP1

Two sets at the end of FP2

Two sets at the end of FP3

The two mandatory sets nominated by Pirelli cannot be given back during practice and must be available for use in the race. At least one of these two sets must be used during the race – but the teams can decide which one.

The top 10 at the end of qualifying will still have to give back the set of the softer compound nominated for Q3, and start the race on the tyres with which they set their fastest time in Q2 (the same rule as is the case currently). All other drivers will be able to use the set that is saved for Q3 during the race.”

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