88 replies to this topic

[jimbox01]

From what I understand the creditors get a proportion of the assets based upon what they are owed. So for instance if Genii are owed £100m, Renault owed £30m and Kimi £20m, then Genii would get 66.7%, Renault 20% and Kimi 13.3% of the assets. However if Genii had paid to run Lotus out of their own pocket then they would not be owed anything. So Renault would get 60% and Kimi would get 40% of the assets if the team were wound up. But you are correct there is some preference for unpaid wages upto £800, taxes and the administrator's fee over normal creditors. I'd be interested to know if Kimi's is considered to be an employee or a supplier? I somehow doubt he pays UK income tax or national insurance contributions.

I would hope it wouldn't come to it, but if the worst did come to the worst, then Lotus would probably end up in administration (voluntary or through a court order), in which case they could / would continue trading until such time as the administrators found a buyer.

If a buyer couldn't be found, then it's the administrators job to realise as much money as possible from the company's assets, and then distribute the money to the creditors.

Secured creditors will get most of the money - this is anyone with a charge over assets of the business. It appears that Proton still has a charge over the assets of the business, including all plant and equipment, work in progress etc. - the whole lot by the looks of it.  

Next in line are preferred creditors, which basically means employees - the taxman used to be preferred, but not anymore.

Finally the unsecured creditors get to pick over the bones.

 

If Kimi is under a contract of employment then he gets the same payout proportionately as all other employees, but if he's on any other sort of contract (very possible), he might not be classified as an employee and therefore he'd receive the same as the unsecured creditors - probably nothing.

 

When Proton took the charge (Feb 2012) assets were valued at about £45M, and outstanding 3rd party loans at the end of 2012 were £40M.  Obviously things will have changed since then, but on that basis it looks like Proton would get their money back and everyone else would be screwed.

[MustangSally]

 . . .  It appears that Proton still has a charge over the assets of the business, including all plant and equipment, work in progress etc. - the whole lot by the looks of it.  

 

When Proton took the charge (Feb 2012) assets were valued at about £45M.

 

That doesn't sound like a whole heap, does it? I thought I also read that the loan was secured on everything . . . show cars, memorabilia and so on.

 

When you think that Bahar and Fernandes spent a million in the High Court just arguing about the badge . . . 

[SonJR]

As far as anyone knows, despite Boullier and Renault saying a new deal is a formality, has a 2014 engine contract actually been officially signed?

[jimbox01]

That doesn't sound like a whole heap, does it? I thought I also read that the loan was secured on everything . . . show cars, memorabilia and so on.

 

When you think that Bahar and Fernandes spent a million in the High Court just arguing about the badge . . . 

Details of the charge Proton has over Lotus assets are available from Companies House, and includes an 18 page breakdown of all the company's tangible assets at that time, everything from test rigs to their entire car collection - it's not that huge actually.  33 cars including show cars and part complete cars.

Obviously they would be taking the lowest estimated realisable value, so it could be worth more than stated, but then how much is a 2011 HP Proliant DL380 worth second hand, or a 1990 milling machine?

[dweller23]

If they surivive 2014, they should be ok. Russian Time wants to become an F1 team from 2015 onwards, so Lotus would be a good choice to rebrand. Of course, that would make it a third Russian team, but I guess very few nations can afford F1 ever since the ban of tobacco sponsorship.

[MustangSally]

As far as anyone knows, despite Boullier and Renault saying a new deal is a formality, has a 2014 engine contract actually been officially signed?

 

Did Boullier say that? Last I read, he talked about 'ticking boxes'. He said something like, when the Quantum deal was closed, he would tick the 'engine box'.

[Module]

Did Boullier say that? Last I read, he talked about 'ticking boxes'. He said something like, when the Quantum deal was closed, he would tick the 'engine box'.

 

Thats worrying if you take a look at the Quantum thread

[Andy Davies]

One thing that interests me is that Genii are lending Lotus money rather than giving it to them. This probably makes them Lotus' largest creditor so if the team were to go bust then Genii would get most of the teams assets. I'm not exactly sure how much their assets would be worth and who would buy them.

 

You can do more tax wise with loans than you can equity.

 

What I don't quite get is in private equity it's pretty normal for the buyer to borrow the money and then assign the loan to the company that's been bought but from what I've read Genii haven't done that in this case. Perhaps having a loan gives them call over the assets if it all goes belly up.

[metz]

They may have done it as a bond issue and placed themselves first in line, ahead of banks, government, employees, suppliers and other creditors.

[Doughnut King]

As I said in the Kimi thread... Lotus is just heading for disaster. There's no way the money works out, unless you have someone very very rich (either individual or corporate) to bankroll the team. You can't make money in F1 racing...

 

It's a huge issue for F1.. and the journalists and broadcasters need to start the alarm bells. F1 is heading for a crash.

 

I wonder what effect that would have on the lower formulas. I imagine the GP2 and 3 teams would feels the effects worse than others.

[nomi]

So where exactly is this Quantum money coming from?

[weareracing]

It's NOT 

[jimbox01]

So where exactly is this Quantum money coming from?

Quantum...

 

But Quantum doesn't have any money, so it has to come from the shareholders first, which comprise of:

A company registered to an address in Brunei (an office suite, solicitors office, or mailing address by the look of it), but it's impossible to say who's behind the company or if it even really exists.

A hedge fund / investment management business based in the US - which means it wouldn't be their own money, they'd need to get it from their investors first.

Another investment / fund management type business based in Abu Dhabi - which again means they're relying on finding (genuine) investors.

 

Quantum is just the instrument they hope to use to channel funds from other [unknown] sources, but that money clearly isn't in place yet otherwise the deal would already be done.

 

 

Just out of interest, another of Ijaz's UK companies, Aquarius Global Partners, has just had a striking off notice issued against them (effectively a first warning), presumably for failing to file annual accounts and returns - their registered office is at the same solicitors as Quantum and they look equally shady.

[Alfisti]

Not even Ron Dennis is keeping Mclaren afloat from his own pocket. Doing that is as financially irresponsible as having a birthday party at an expensive club and handing over your credit card over for a tab. You can be bleed dry very quickly. 

 

Like Ron Dennis famously said once: Formula 1 is not for those with faint of wallets

 

People do this everyday, especially douche type people.

[Brother Fox]

If genii have got into this game with the intention of funding it for a while and then selling it, it would be madness if they havent covered their arses by being a secured creditor (substitute local term) to give them priority over other creditors in the event of winding up.

Which if that happens, the racing team is well and truly ****ed!

 

 

I've said it before, as with Sauber (and Lotus is even more so), when a team with history, current results and some big corporate sponsors (Total/Unilever) is struggling somethings wrong, very wrong.

[jstrains]

According to AMuS is the contract with Quantum in danger

http://www.auto-moto...as-7896977.html

[nomi]

Quantum...

 

But Quantum doesn't have any money, so it has to come from the shareholders first, which comprise of:

A company registered to an address in Brunei (an office suite, solicitors office, or mailing address by the look of it), but it's impossible to say who's behind the company or if it even really exists.

A hedge fund / investment management business based in the US - which means it wouldn't be their own money, they'd need to get it from their investors first.

Another investment / fund management type business based in Abu Dhabi - which again means they're relying on finding (genuine) investors.

 

Quantum is just the instrument they hope to use to channel funds from other [unknown] sources, but that money clearly isn't in place yet otherwise the deal would already be done.

 

 

Just out of interest, another of Ijaz's UK companies, Aquarius Global Partners, has just had a striking off notice issued against them (effectively a first warning), presumably for failing to file annual accounts and returns - their registered office is at the same solicitors as Quantum and they look equally shady.

 

So basically this Mansour Ijaz guy is just a lead consultant for who ever is investing the money.

I find it slightly odd that investors themself wouldn't be direclty engaged with Lotus face to face as this is F1 business.

Do they need this Ijaz guy??

Edited by nomi, 12 November 2013 - 04:10.

[george1981]

Regarding Maldonado, he's rumoured to bring £30m a year from PVDSA. Is that enough to keep the team afloat? I remember the Marussia team principal saying that it cost £60m a year just to go racing, whatever was left went on making the car go faster. Marussia had £2m to make the car quicker whereas some of the bigger teams had £100m to make the car go quicker.

[pingu666]

the larger teams have more stuff to pay for, but lotus could downsize abit I guess

[SenorSjon]

Regarding Maldonado, he's rumoured to bring £30m a year from PVDSA. Is that enough to keep the team afloat? I remember the Marussia team principal saying that it cost £60m a year just to go racing, whatever was left went on making the car go faster. Marussia had £2m to make the car quicker whereas some of the bigger teams had £100m to make the car go quicker.

You also have Total with an alleged € 12m.

Also the WCC price money is € 20-30m?

Coca Cola (Burn) and Rexona (Unilever) also pay something.

[MustangSally]

the larger teams have more stuff to pay for, but lotus could downsize abit I guess

 

In the most recent interview with Lopez . . . I think in Die Welt . . . Lopez addressed that question. He said indeed that Lotus could be a team with 200 employees, but that would put 300 families on the street. So it doesn't sound like his intention.

 

He also said that the team was a 'valuable marketing tool' for Genii and that the bulk of the money was owed to itself (Genii group) as opposed to other people. In this way, he insisted, Lotus was in better shape than some others on the grid. Anyway, this was his upside view.

 

As others have noted, however, the lack of an engine deal seems more ominous with every passing day. Are they busy designing an imaginary car for next year? It is surely rather a fundamental unit to have in place.

 

The other cash-strapped teams got this sorted quite early on. 

[Icetrala]

Situation with Lotus looks really bad.

SuomiF1's article http://www.suomif1.c...ita-syntymassa/ (which is actually very reliable F1 media in Finland)

 

Pirelli will test 2014 tires in the upcoming weeks in Bahrain.

 

Dispute ingredients exist because the test is avaliable only for Red Bull, Mercedes and Ferrari.

 

Lotus was asked to join as well but they refused to come relying on the financial situation. However all teams will get the data.

 

- Season 2014 hasn't even started and there are already disputes, journalist Alberto Antonini writes.

 

What do you think? I think it's pretty worrying if they don't even have money to attend to the tyre tests. I assume they wont be very competitive next year.. Unless they get a lot of money somewhere.

Edited by Icetrala, 02 December 2013 - 11:21.

[Kelateboy]

Yes, Lotus will survive for as long as PDVSA and Total are on board.

 

They have a better chance of staying in Formula 1 in the V6 turbo era than either Williams, Sauber, Force India, Caterham or Marussia.

[Gorma]

Yes, Lotus will survive for as long as PDVSA and Total are on board.

 

They have a better chance of staying in Formula 1 in the V6 turbo era than either Williams, Sauber, Force India, Caterham or Marussia.

If Lotus wasn't able to attract sponsors and partners with a succesfull star driver onboard how is it going to survive now since the last remains of credibility have gone down the drain with this Quantum fiasco. PDVSA and Total money tied to Grosjean and Maldonado. 

 

Williams is going no where. 

[Kelateboy]

If Lotus wasn't able to attract sponsors and partners with a succesfull star driver onboard how is it going to survive now since the last remains of credibility have gone down the drain with this Quantum fiasco. PDVSA and Total money tied to Grosjean and Maldonado. 

 

Williams is going no where. 

 

They will survive 2014, 2015 and 2016 with Total and PDVSA's money. Beyond that, anything is possible including going under, and getting rescued by a white knight.

[Shiroo]

If Lotus wasn't able to attract sponsors and partners with a succesfull star driver onboard how is it going to survive now since the last remains of credibility have gone down the drain with this Quantum fiasco. PDVSA and Total money tied to Grosjean and Maldonado. 

 

Williams is going no where. 

 

You people really are giving too much about "start driver". It is all about owner connections etc. And driver connections like Maldonado or Grosjean. You can be Kimi Raikkonen and do not get a single sponsorship, just because you do not have a connections in business world or you have wrong nationality

Edited by Shiroo, 02 December 2013 - 11:52.

[Gorma]

You people really are giving too much about "start driver". It is all about owner connections etc. And driver connections like Maldonado or Grosjean. You can be Kimi Raikkonen and do not get a single sponsorship, just because you do not have a connections in business world or you have wrong nationality

That's exactly what I am saying. Even with a marketable driver and a successful team they weren't able to make anything of it. How are they going to survive with this potentially turning for the worse.

[Shiroo]

That's exactly what I am saying. Even with a marketable driver and a successful team they weren't able to make anything of it. How are they going to survive with this potentially turning for the worse.

 

Well, they have PDSVA. On their place, I would take such sponsorship instead of start driver, anyday.

[Icetrala]

Well, they have PDSVA. On their place, I would take such sponsorship instead of start driver, anyday.

Yeah but PDVSA + Total combination can't bring so much money that they can actually develop competitive car. They have to pay debts of season 2013 as well.

[Shiroo]

Yeah but PDVSA + Total combination can't bring so much money that they can actually develop competitive car. They have to pay debts of season 2013 as well.

 

well I believe that PDVSA prevented option of being used as "debt payer".

[ardbeg]

That's exactly what I am saying. Even with a marketable driver and a successful team they weren't able to make anything of it. How are they going to survive with this potentially turning for the worse.

Yes. A marketable name (Lotus is history, glory), a marketable driver. No money. They still have the name, but Maldonado is not going to sell many t-shirts, he will not draw many to press conferences. Neither will Romain. Future looks dark.

[santababy]

How long is Pastor contract with Lotus?
What about Grosjean?

[metz]

How long is Pastor contract with Lotus?
What about Grosjean?

Contracts with Lotus don't mean much.

Ask Heidfeld or Petrov.

[Kelateboy]

That's exactly what I am saying. Even with a marketable driver and a successful team they weren't able to make anything of it. How are they going to survive with this potentially turning for the worse.

 

Other than Red Bull, Ferrari, Mercedes and McLaren, the other teams are struggling to make ends meet in Formula 1. Even Mercedes could go the way of Honda, Toyota and BMW of recent years if they could not find success fast enough and/or their title sponsor Petronas decides to support another outfit.

 

Lotus' outlook is gloomy, and so do those of Williams, Marussia, Caterham, and Sauber. How long could Marussia last in Formula 1 when they made £59m net loss in 2012? Williams had £4.6m net loss last year and the bad news continued after the end of this season PDVSA sponsorship estimated at £30m per year. Sauber had to beg for Russian and Mexican money to stay afloat. Caterham was looking for a white knight and contemplated a merger exercise either with Marussia or Williams.

 

I'd be happy to see Lotus surviving until 2016 with PDVSA/Total money. Beyond that, the outlook does not look too rosy unless they manage to offload some shares to Quantum Motorsports.

[Slackbladder]

Basic questions

 

1) What is Lotus's 'budget' IE what are the year on year running costs of the team, from the car development, to driver salaries, to the infrastructure and the support services

 

2) What is their income. In terms of money from sponsors etc, and Bernie, and others

 

3) What underlying debt do they have, and how will they service that debt, let alone repay it...

 

Those are the three key numbers, and if they don't work together right... Houston/Entstone, we have a problem.

[santababy]

Contracts with Lotus don't mean much.
Ask Heidfeld or Petrov.

True but Grosjean & Pastor have oil $ backing so maybe they won't be treated too badly.
Especially Grosjean's manager is also the Team Principal.

[elchukakabra]

True but Grosjean & Pastor have oil $ backing so maybe they won't be treated too badly.
Especially Grosjean's manager is also the Team Principal.

And Petrov had Lada

[metz]

Contracts don't mean much for Pastor either.

He terminated Williams early.

I assume at a penalty.

[motorhead]

Interesting article on Venezuelas crisis, PDSVA mentioned too http://latino.foxnew...is-without-end/