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Lotus in financial troubles… Again.


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#1 emmanuelrubi

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Posted 01 August 2014 - 18:41

According to Grand Prix 247 in this article.

 

http://www.grandprix...as-debts-mount/

 

Lotus is having financial troubles again even they finished in 4th in the WCC in the last two years, they have an enormous debt around the €185 millions by 2013.

 

The report said that just one year ago, the loss was only 55 million, while total debt is now shown at a whopping €185 million.

Tageblatt also claims that although company filings are due no later than seven months after the end of the financial year, Genii only filed the accounts for 2011 and 2012 in mid-July of this year.

The accounts for 2013 have not yet been filed. (GMM)

 

Wonder how things will change in 2014/2015 with their new sponsors (PDVSA 30 M) but their poor result of the season (Maybe 7th or 8th).


Edited by SophieB, 01 August 2014 - 18:44.
Please do not paste whole articles.


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#2 jcbc3

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Posted 01 August 2014 - 19:49

Not Lotus. Genii Capital.

#3 Ferrari_F1_fan_2001

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Posted 01 August 2014 - 20:12

Such a shame. They have excellent facilities and an engineering pedigree but the lack of funds is really holding them back. Maldonado's poor reliabiity shows just how far from perfect they really are.

#4 Lotus53B

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Posted 01 August 2014 - 20:25

Such a shame. They have excellent facilities and an engineering pedigree but the lack of funds is really holding them back. Maldonado's poor reliabiity shows just how far from perfect they really are.

He brings a lot of money, so he's back for next year.

 

Such a shame.



#5 Dick Dastardly

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Posted 01 August 2014 - 20:45

Did Kimi finally get paid for last year?... 



#6 blub

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Posted 02 August 2014 - 04:52

According to many reports from last year Lotus has been for sale for over a year, they want $400 million for it. This latest report says that lotus (the owners of) are in the hole for $185 million as of the end of 2012. The trend is greater debt each year, so, end of 2013 more then $185 million and end of 2014 most likely more then 2013 debt.

So they want to sell and $400 million was the price in 2013, that number is a crazy insane high price especially with the exit of so many top team members and the performance that has followed, its damaged goods. So why $400 million, its simple, these owners want their money back, all that debt is from them, they want it back AND they want some profit. I guess getting your own F1 team is the equivalent of telling everyone your still a kid, but rich. Watch this Mom, no hands, and I get to lose a massive amount of my money!

Right now those Lotus owners are living in the nightmare scenario of nightmare scenarios, how does it go, “how do you make a small fortune in F1, start with a large one”. These owners are living this, their debts are now higher then the price they will ever get for a sale of the team, I would guess under $200 million, the Lotus owners will lose money on their “investment” and they don’t seem to have realized it just yet, and the debt keep on growing.

I think Lotus is the most desirable team for someone to buy, if they want into F1, but the price will be much lower then the total debt. When the folks a Geni finally concede that its over, because of the financial pain, no one will be around to buy it from them. If I were in the market for a team and Lotus looked like the right choice, I would wait for it to die and pick up the pieces at the auction of their stuff. I am sure the layers of advisors and consultants that make up the intelligentsia of F1 have been saying this for some time, Geni wants too much, wait for them to go bankrupt then buy at the auction. Geni is living the nightmare, they should get out today not tomorrow, if they want to lose less money.



#7 HoldenRT

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Posted 02 August 2014 - 05:43

Bit of a mess.  This is a season they needed a Merc engine, like Williams have.



#8 Jejking

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Posted 02 August 2014 - 09:45

Did Kimi finally get paid for last year?... 

About Everything has been paid off iirc.



#9 Hans V

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Posted 02 August 2014 - 11:23

Why would anyone want to buy an F1 team? F1 is not sustainable, the costs for competing are insane, the money required for being competetive many times that and potential income is nowhere near covering the costs. Historically, this gap have never been higher.

Lotus has done quite well considering their resources but have lost most of its key personell, is practically bankrupt and cannot possibly keep it up much longer.

#10 Anders Torp

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Posted 02 August 2014 - 12:16

Why would anyone want to buy an F1 team?


Good question. It would be nice to hear Caterham's new owners answer.

#11 Rentta

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Posted 02 August 2014 - 13:47

About Everything has been paid off iirc.

Lotus has paid some of it kimi said to finnish media couple months ago



#12 HoldenRT

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Posted 02 August 2014 - 13:58

Rich people like to have toys to play with.  An F1 team is pretty much the ultimate toy.  But I guess it's not so fun if you have a poor car or start losing money.  Sort of like how some people buy dogs and love them when they are puppies but grow tired of them once the puppy charm wears off.

 

It makes sense for big car companies because there can be parallels between their success on the track and the marketing of their brand, but for more private owners, yeah it's a bit harder to understand.  It takes such a huge investment (and a love of the sport really..) to be able to turn something into a winner.  It's so competitive at the front.  I guess similar to the drivers (to get into F1 or to win a race) maybe for them, they see it as the ultimate challenge.



#13 Ross Stonefeld

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Posted 02 August 2014 - 14:05

I don't think anyone's bought an F1 team as a vanity exercise in a long time. It was mostly business people coming in thinking they could do something with it.



#14 milestone 11

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Posted 02 August 2014 - 14:21

Company Check, which is free can be accessed by anyone. Below clearly shows the company position. Frankly, I'm amazed that the are still trading, their adviser would in my opinion be remiss for not telling them to cease forthwith.

A limited company becomes insolvent  when it can no longer pay its bills when due, or its liabilities—including any contingencies that it may have a committment to, i.e. staff pensions etc. Trading whilst insolvent is illegal. The directors need to be very careful that they don't become liable to the debt. English law I believe says that any director who knows that the company is insolvent and knowingly makes the decision to continue to trade, and in doing so increases the debts of the company can be made liable for the company debts.

Who in their right mind is going to pay Lopez and Lux £400m for a company that has a balance sheet similar to this, no one. Just wait for the inevitable.

Capture1Lotus_zps2dc7194d.jpg

capture2Lotus_zps91adb0ce.jpg



#15 Hans V

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Posted 02 August 2014 - 14:23

It might be vanity, ego, whatever, but I guess it's a sobering experience spending fortunes only to get humiliated every other sunday....

#16 taran

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Posted 02 August 2014 - 16:08

Lotus would hardly be the first team to spend money they don't have in the hope of getting a sugar daddy later. There are basically 2 ways a team can operate if it lacks the big bucks. One can spend wisely and hope for a few good results like Arrows, Sauber and Minardi used to do. Or spend money you don't have in the hope of attracting a sugar daddy. Lotus and previously Arrows under Walkinshaw tried that for example. IMO, that hardly ever works. Perhaps the Benetton sale to Renault counts or Jaguar to Red Bull but in both cases, there was little success to entice the eventual buyers. Both just wanted a team for their own reasons.

 

In this case, Genii hoped to win enough in B2B deals to make it worth their while. But with Lotus more competitive than probably expected, they overspent. And now are more heavily in debt as a result.

 

Oh, and can we please stop pretending they did a great job on a small budget. Lotus spend big boy money to get big boy results. Hence the huge debt.... 



#17 Mohican

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Posted 04 August 2014 - 17:44

OK, so who is the moneybag in the other Lotus-Mercedes next year ? Sooner or later some high profile driver will lose his seat because of financial problems; there is nothing to say that they will have the money to retain Grosjean even if he does not move to McLaren.

#18 MikeV1987

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Posted 04 August 2014 - 17:48

cant see their line up changing tbh.



#19 emmanuelrubi

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Posted 04 August 2014 - 19:12

If Lotus leaves where does its drivers will end up?



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#20 SealTheDiffuser

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Posted 04 August 2014 - 21:53

If Lotus leaves where does its drivers will end up?

 

gutter, McLaren, FINDIA?



#21 Risil

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Posted 04 August 2014 - 22:21

Oh, and can we please stop pretending they did a great job on a small budget. Lotus spend big boy money to get big boy results. Hence the huge debt.... 

 

Which of their competitors did their technical budget match most closely?



#22 emmanuelrubi

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Posted 05 August 2014 - 02:58

gutter, McLaren, FINDIA?

 

Lol its hard for me to imagine Pastor Maldonado working with Ron Dennis.



#23 boldhakka

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Posted 05 August 2014 - 03:05

Which of their competitors did their technical budget match most closely?

 

IIRC, in 2011, Lotus spent more than Marc did. 



#24 George Costanza

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Posted 05 August 2014 - 03:07

Lol its hard for me to imagine Pastor Maldonado working with Ron Dennis.

 

Oy. I can't imagine what Ron would do.



#25 warp

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Posted 05 August 2014 - 05:27

If Lotus leaves where does its drivers will end up?

 

Maldonado is "easy prey" as he has some money backing and could go anywhere where 20mill are needed (Sauber?) Grosjean could end up at a Renault powered team, I suppose (Formerly Caterham?)



#26 William Hunt

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Posted 05 August 2014 - 15:21

OK, so who is the moneybag in the other Lotus-Mercedes next year ?

 

Malaysian driver Jazeman Jaafar is rumoured to be a strong contender for the 2dn Lotus seat with Petronas money.



#27 SealTheDiffuser

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Posted 05 August 2014 - 18:17

"drivers" you said, GRO maybe to McLaren, MAL maybe to IFNDIA


Edited by SealTheDiffuser, 05 August 2014 - 18:18.


#28 HistoryFan

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Posted 05 August 2014 - 19:11

Malaysian driver Jazeman Jaafar is rumoured to be a strong contender for the 2dn Lotus seat with Petronas money.

Interesting rumour, but would that work with PDVSA and Petronas? I don't think so. It's a shame that there are not two liveries for a team allowed...



#29 emmanuelrubi

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Posted 05 August 2014 - 20:14

Interesting rumour, but would that work with PDVSA and Petronas? I don't think so. It's a shame that there are not two liveries for a team allowed...

 

Total & PDVSA.



#30 Myrvold

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Posted 05 August 2014 - 20:47

Total & PDVSA.

Do co-op in some areas.



#31 Petroltorque

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Posted 28 August 2014 - 07:44

The only way Genii are going to recoup any of their outlay is if they can establish Lotus as a semi works outfit. Losing the tie up with Renault has been a major blow. Even going to Mercedes as a customer is not the answer as they will simply be retro fitting a non bespoke engine. One option might be a Cosworth tie up where they find an investor to back their engine program. This has the added benefit of selling on the technology. The other problem I see is that Lotus' tech Director Nick Chester is turning into the Next Nick Wirth rather than the next Rory Byrne.

#32 SonJR

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Posted 28 August 2014 - 15:11

I have a feeling they're going to be a year late on the Merc-engine giving them exceptional results too. An increase, sure, but I don't see them making a leap to beyond Force India-level with the type of rate of progress of other teams involved.



#33 jestaudio

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Posted 28 August 2014 - 15:21

Its a pity a iconic name like Lotus has been reduced to these depths in if it is only a tenuous connection with the "real" lotus team which was iconic, at least for those of us old enough to remember them



#34 Anders Torp

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Posted 28 August 2014 - 16:35

One option might be a Cosworth tie up where they find an investor to back their engine program.


Good luck with that!

#35 InSearchOfThe

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Posted 28 August 2014 - 17:26

http://www.crash.net...r-italy-us.html



#36 Gemini

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Posted 28 August 2014 - 20:32

According to many reports from last year Lotus has been for sale for over a year, they want $400 million for it. This latest report says that lotus (the owners of) are in the hole for $185 million as of the end of 2012. The trend is greater debt each year, so, end of 2013 more then $185 million and end of 2014 most likely more then 2013 debt.

So they want to sell and $400 million was the price in 2013, that number is a crazy insane high price especially with the exit of so many top team members and the performance that has followed, its damaged goods. So why $400 million, its simple, these owners want their money back, all that debt is from them, they want it back AND they want some profit. I guess getting your own F1 team is the equivalent of telling everyone your still a kid, but rich. Watch this Mom, no hands, and I get to lose a massive amount of my money!

Right now those Lotus owners are living in the nightmare scenario of nightmare scenarios, how does it go, “how do you make a small fortune in F1, start with a large one”. These owners are living this, their debts are now higher then the price they will ever get for a sale of the team, I would guess under $200 million, the Lotus owners will lose money on their “investment” and they don’t seem to have realized it just yet, and the debt keep on growing.

I think Lotus is the most desirable team for someone to buy, if they want into F1, but the price will be much lower then the total debt. When the folks a Geni finally concede that its over, because of the financial pain, no one will be around to buy it from them. If I were in the market for a team and Lotus looked like the right choice, I would wait for it to die and pick up the pieces at the auction of their stuff. I am sure the layers of advisors and consultants that make up the intelligentsia of F1 have been saying this for some time, Geni wants too much, wait for them to go bankrupt then buy at the auction. Geni is living the nightmare, they should get out today not tomorrow, if they want to lose less money.

 

Don't worry that much about Genii. The numbers you reading from Lotus Balance Sheet do not have to translate to Genii pain in same amount.

 

First, Lotus debt is primary loans from Genii. So what is current liabilities on Lotus B/S is current assets on Genii B/S.

Second, we don't know what was interest rates on those loans. Maybe they were quite higher over market rates, and what contributed to Lotus losses turned into profits on Genii books. Sure they are only profits not cash flow, as Lotus does not pay it back. But I wonder how much of this debt is principal amount borrowed from Genii and how much are capitalized interests.

Third, we don't know what the transfer pricing tricks were used by Genii. I can imagine a lot of management fees beeing charged by Genii to Lotus, or commissions on sponsors brought by Genii.

 

Sure, all that Genii revenues and profits are just paper they are printed on untill Lotus generates enough cash to pay them. And this is were Lotus main problems generate. They played with the big boys and they never get paid close to what big boys are paid by Bernie. Unfair distrubution of money in Tab B payments (to Ferrari, Lotus, McLaren and Williams) means for example that in situation that Lotus wins WCC and Ferrari comes last in WCC, Ferrari still gets more money from FOM that Lotus does.

 

So IMO the only sound reason to hang into this investment is to wait for that FOM payment model to change, or getting manufacturer in, or getting some rich Gulf Prince looking for ways to impress his fiance by buing into F1 team ;-)

 

I am not saying that Genii will get out from this business with dry feet. But they actual losses may end up way lower that  Lotus financial statements filings suggests.



#37 jimbox01

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Posted 29 August 2014 - 00:00

I had a look at their latest accounts soon after they were published, and while a £65M loss (their biggest yet) seems pretty catastrophic, compared to the amount Red Bull GmbH pumps into F1 every year it's reasonably modest - more on the high side of modest really.

 

Genii choose to put their money into the team in the form loans (which means it could theoretically be repaid one day), Red Bull GmbH write their annual £90-£100M off as marketing costs.

Lotus F1 only survives thanks to the continuing support of the parent company.

Red Bull Racing and Red Bull Technology would probably collapse without the ongoing support of Red Bull GmbH.

Same same but different.

 

But then Lotus F1 losing £65M in one year sounds much more dramatic than Red Bull GmbH have spent another £90-£100M on their team.



#38 Nitropower

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Posted 29 August 2014 - 00:32

Don't worry that much about Genii. The numbers you reading from Lotus Balance Sheet do not have to translate to Genii pain in same amount.

First, Lotus debt is primary loans from Genii. So what is current liabilities on Lotus B/S is current assets on Genii B/S.
Second, we don't know what was interest rates on those loans. Maybe they were quite higher over market rates, and what contributed to Lotus losses turned into profits on Genii books. Sure they are only profits not cash flow, as Lotus does not pay it back. But I wonder how much of this debt is principal amount borrowed from Genii and how much are capitalized interests.
Third, we don't know what the transfer pricing tricks were used by Genii. I can imagine a lot of management fees beeing charged by Genii to Lotus, or commissions on sponsors brought by Genii.

Sure, all that Genii revenues and profits are just paper they are printed on untill Lotus generates enough cash to pay them. And this is were Lotus main problems generate. They played with the big boys and they never get paid close to what big boys are paid by Bernie. Unfair distrubution of money in Tab B payments (to Ferrari, Lotus, McLaren and Williams) means for example that in situation that Lotus wins WCC and Ferrari comes last in WCC, Ferrari still gets more money from FOM that Lotus does.

So IMO the only sound reason to hang into this investment is to wait for that FOM payment model to change, or getting manufacturer in, or getting some rich Gulf Prince looking for ways to impress his fiance by buing into F1 team ;-)

I am not saying that Genii will get out from this business with dry feet. But they actual losses may end up way lower that Lotus financial statements filings suggests.


If Lotus debts are mostly Genii's assets then Genii has a problem called bad debt. Those assets have no actual value if Lotus can't generate enough revenue and/or Genii can't find an investor willing to pay the price, which should be not only the cumulative debts but also the shares and a surplus for the future cash flows that Lotus would need to be able to produce

#39 Nitropower

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Posted 29 August 2014 - 00:32

Don't worry that much about Genii. The numbers you reading from Lotus Balance Sheet do not have to translate to Genii pain in same amount.

First, Lotus debt is primary loans from Genii. So what is current liabilities on Lotus B/S is current assets on Genii B/S.
Second, we don't know what was interest rates on those loans. Maybe they were quite higher over market rates, and what contributed to Lotus losses turned into profits on Genii books. Sure they are only profits not cash flow, as Lotus does not pay it back. But I wonder how much of this debt is principal amount borrowed from Genii and how much are capitalized interests.
Third, we don't know what the transfer pricing tricks were used by Genii. I can imagine a lot of management fees beeing charged by Genii to Lotus, or commissions on sponsors brought by Genii.

Sure, all that Genii revenues and profits are just paper they are printed on untill Lotus generates enough cash to pay them. And this is were Lotus main problems generate. They played with the big boys and they never get paid close to what big boys are paid by Bernie. Unfair distrubution of money in Tab B payments (to Ferrari, Lotus, McLaren and Williams) means for example that in situation that Lotus wins WCC and Ferrari comes last in WCC, Ferrari still gets more money from FOM that Lotus does.

So IMO the only sound reason to hang into this investment is to wait for that FOM payment model to change, or getting manufacturer in, or getting some rich Gulf Prince looking for ways to impress his fiance by buing into F1 team ;-)

I am not saying that Genii will get out from this business with dry feet. But they actual losses may end up way lower that Lotus financial statements filings suggests.


If Lotus debts are mostly Genii's assets then Genii has a problem called bad debt. Those assets have no actual value if Lotus can't generate enough revenue and/or Genii can't find an investor willing to pay the price, which should be not only the cumulative debts but also the shares and a surplus for the future cash flows that Lotus would need to be able to produce

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#40 Vinsin

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Posted 01 September 2014 - 12:34

According to Grand Prix 247 in this article.

http://www.grandprix...as-debts-mount/

Lotus is having financial troubles again even they finished in 4th in the WCC in the last two years, they have an enormous debt around the €185 millions by 2013.


Wonder how things will change in 2014/2015 with their new sponsors (PDVSA 30 M) but their poor result of the season (Maybe 7th or 8th).

Lotus should really have been 3rd in WCC in 2012 & 2013.

They finished 4th in the WCC in 2012 & 2013 because Boullier was Grosjean's manager.
Most of Lotus development money went down the drain fixing Grosjean's crashed car throughout both seasons, massive ones at that.
Lotus lost many Millions by losing possible 3rd in the WCC when they promoted Grosjean to Team Leader from Monza 2013 onwards, while shafting their proven point scorer who was still with the team. Simple case of Lotus management getting ahead of themselves there.

Grosjean is no team leader, and now they have someone more irritating than him in Maldonado. I guess Lotus deserves what they are getting for sure. Hanging out with a Conman wasn't smart either, as interested clean corporates who can use Google wouldn't want such associations to begin with.

Lotus management still frustrates when they refuse to accept reality of lawful contracts, payment on deals & suppliers, so they will continue to suffer.

Edited by Vinsin, 01 September 2014 - 12:39.


#41 William Hunt

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Posted 01 September 2014 - 15:37

Bouiller was never Grosjean's manager, Grosjean is managed by Gravity which is owned by Lopez & Lux, Bouiller was the manager of the Lotus F1 team just like he is now the maneger of the McLaren F1 team and just like he was the manager of the DAMS GP2 team before he went to Lotus.



#42 darkkis

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Posted 01 September 2014 - 16:39

If Lotus debts are mostly Genii's assets then Genii has a problem called bad debt. Those assets have no actual value if Lotus can't generate enough revenue and/or Genii can't find an investor willing to pay the price, which should be not only the cumulative debts but also the shares and a surplus for the future cash flows that Lotus would need to be able to produce

So if someone was to buy Lotus, they'd inherit the debts as well?? Absolutely ridiculous. Genii tries to get profit from the team by lending money, but it's going to backfire cos no one will ever buy a team + pay those huge debts.



#43 Gemini

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Posted 01 September 2014 - 17:01

The debt payment will be part of payment for purchase price. So you may have a sexy headline "Genii sells Lotus for $300m", while in reality if debts are $200, the buyer will pay the debts back and then pay Genii remaining $100m.


Edited by Gemini, 01 September 2014 - 17:02.