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Renault paid just £1 to buy Lotus F1 team

Renault paid just £1 to buy Lotus F1 team

Renault paid just £1 to take over the Lotus Formula 1 team when the deal was finalised just before Christmas, company accounts have revealed.

(L to R): Carlos Ghosn, Chairman of Renault on the grid with Jean-Michel Jalinier, Renault F1 Sport President and Managing Director
Jolyon Palmer, Lotus F1 E23 Test and Reserve Driver
Renault F1 Sport truck. Formula One Testing, Day Two, Wednesday
Red Bull Racing Comms Unit and Renault F1 Sport Truck with some dark clouds hanging over it
Pastor Maldonado, Lotus F1 E23
Cyril Abiteboul, Renault F1
Romain Grosjean, Lotus F1 Team

Delivering an indication of just how keen the previous owners were to find new funding and an investor who could pay off past debts, only a token payment was necessary to finalise the deal.

Accounts also confirm that Genii Capital and its affiliate Gravity Motorsports have retained 10 percent 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.

'New' company harks back to the past

Having established full ownership of the share capital it then sold 90 percent to Grigny (UK) Ltd – the company that previously owned the F1 team in its Benetton and Renault days – while retaining the remaining 10 percent.

Grigny is a subsidiary of Renault, and in fact, its immediate owner is Renault Developpement Industriel et Commercial, or RDIC.

It 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.

Renault completed its takeover of Lotus earlier this month and is expected to outline its plans in a press conference early next year.

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Series Formula 1
Author Adam Cooper