Letter of intent signed for Lotus buy-out

Renault have signed a letter of intent to buy back a controlling stake in the Lotus F1 team.

Rumours have been flying around the paddock for a number of months with an array of reports regarding the details of the proposed deal.

The general consensus appears to indicate that Renault had made an offer to Genii Capital to buy back a 65% stake in the Lotus team which is valued at around £65million.

The offer includes a staggered payment period over a 10-years, but Renault would also put together a sponsorship package which would cover the team’s operating budget.

Former four-time Formula One World Champion Alain Prost could also be set to buy a stake in the team, the former team owner could become the new team principal if the takeover is completed or take a role similar to Niki Lauda at Mercedes.

Current co-owner Genii Capital could end up keeping a 25% stake in the team which is for all intense and purposes funded by Renault and receive regular payments of around £540,000-a-month.

However that deal appears to be taking its time and Lotus have slumped from financial problem to financial problem, including at the last race in Japan.

This led towards the re-signing of Pastor Maldonado as his influential PDVSA sponsorship has kept the team going day-to-day.

It wasn’t clear if this would upset Renault, but French manufacturer have now made their first formal move towards returning to Formula One as a full works team.

The news was also enough for Lotus’ case over an unpaid tax bill from HMRC to be adjourned for 70 days until December 7th.

‘Renault have made a loan available to Lotus to cover this outstanding tax bill so that has been paid off,’ Sky Sports News reporter Craig Slater said from London’s High Court.

‘However, the administration case has not been dropped. Because it has been adjourned rather than dropped it means it stops other creditors bringing legal petitions against Lotus in that period.’

Key to the takeover are talks between Renault and Formula One supremo Bernie Ecclestone regarding heritage payments.

Renault have a long and illustrious history with Formula One, making their debut in 1977, winning their first race at the 1979 France Grand Prix with Jean-Pierre Jabouille.

As an engine supplier they have won nine Formula One Drivers titles, 1992 Nigel Mansell (Williams), 1993 Alain Prost (Williams), 1995 Michael Schumacher (Benetton) , 1996 Damon Hill (Williams), 1997 Jacques Villeneuve (Williams) and 2010-2013 Sebastian Vettel (Red Bull Racing).

They have also taken ten Formula One World Constructors’ Championships (1992?1997 and 2010?2013) for Benetton, Williams and Red Bull Racing.

As a manufacturer they have also won the Formula One World Drivers Championship with Fernando Alonso in 2005 and 2006 and also won back-to-back Formula One World Constructors titles.

Renault power has won over 160 Grand Prix, ranking third in Formula One history.

Due to this Renault would like to receive heritage payments such as those received by Ferrari, Mercedes, McLaren and Williams.

Craig Slater added: ‘This has been a sticking point for Renault coming back into the sport and Mr Ecclestone revealed they had come to some sort of understanding during negotiations, but that deal was still to be finalised.