Genii Capital sells 35% of Lotus to an investment fund
For months, Gérard Lopez has been claiming that he is ready to open up Lotus's capital to other investors. It is now a done deal with the sale of 35% of the team's capital to the investment fund Infinity Racing.
At first glance, this transfer might surprise F1 fans seeing a name eerily close to Red Bull’s title sponsor, a subsidiary of Renault and Nissan. This is not the case as the spelling of the name is not the same, and the team establishes its new co-owner as being an investment consortium, formed of private investors including an American hedge fund manager, a multinational group based in Abu Dhabi, and the interests of the royal family of a major oil-producing country.
Joe Saward, one of the paddock’s leading authorities on economics, reveals to us who these designated people are. The largest shareholder of Infinity Racing, with 60% of the capital, is a company based in Brunei, whose sultan is one of the world’s wealthiest individuals. Enthusiasts of Scuderia Ferrari might recall that Asprey, a British luxury jewelry giant, was a sponsor of Ferrari in the 1990s when it was owned by one of the sultan’s brothers.
Nevertheless, 70% of the company’s preferred shares are held by the American investor Mansoor Ijaz. Since these shares provide voting rights on the board of directors, he effectively controls the company, even though he only owns 20%. The remaining capital and preferred shares are held by the Abu Dhabi-based investment fund, Al Manhal International. This fund specializes in the energy sector. This implies that Brunei’s presence is merely intended to be a passive shareholder, with the financial risk being very limited for a state where the sultan owns a car collection estimated at five billion dollars!
Gérard Lopez, the president of Lotus F1 Team, commented on this announcement: « The leaders of Infinity Racing have exceptional expertise and recognized competence in the development and implementation of high-quality technologies. This partnership will enable us to enhance the competitive advantage of Lotus F1 Team related to KERS technology, as it becomes a focal point in Formula 1’s effort towards more environmentally open competition. This will also make Lotus F1 Team more attractive in the market as a brand and open up opportunities for major new sponsors. »
It is interesting to note that a particular focus is given to the KERS, even though this element is not produced by the team but by its engine supplier, currently Renault. This trend will be even more true next year when the new engine block will be equipped with two energy recovery systems. This can fit within the development projects of Al Manhal, which has projects in motorsports, notably Al Manhal Green Motor Sports. The aim of this project is to address the issue posed by electric sports vehicles: the lack of noise!
From the team’s perspective, the arrival of new investors will bring fresh capital, necessary after a loss of 56 million pounds in the 2012 financial year. This should allow the team to compensate for the absence of a title sponsor (Lotus has not provided any funds to the team since the 2012 season) and therefore have the essential funds if it wishes to maintain its status as a world title contender. This is a crucial argument for retaining one of its main assets, Kimi Räikkönen. Without a car capable of competing for victory, the Finn could decide to look elsewhere, notably at Red Bull.
The coming months will therefore be essential for the immediate and medium-term future of the team.
With the participation of www.Racingbusiness.fr
