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A storm in a teacup

NEWS STORY
12/04/2012

Yesterday's remarkable press release from Lotus Cars has generated a huge amount of media attention but for all the wrong reasons.

Largely, the attention was focussed on the naming of a journalist who has 'attacked' several F1 teams in recent years, including Lotus. The journalist didn't help his case by joining the board of Caterham Cars Group, a company which is co-owned by Tony Fernandes, one of the owners of Lotus' arch rival, the Caterham F1 team.

This kind of appointment is nothing new. It was well known that veteran F1 reporter Alan Henry was a member of the British Racing Drivers Club which owns Silverstone. Likewise, we all remember that Speed TV's pit lane reporter Peter Windsor took up a position as a director of the ill-fated USF1 team.

Windsor's case is a good example because he stepped down from his Speed TV post when he got the USF1 job - a move which didn't pay off as the team never got anywhere near the starting grid. In contrast, Caterham's director didn't help his case by not confirming on his blog his directorship until more than three months after he took it up and this admission only came following a report by another website which revealed it. The fact that the journalist has spent much of the past year writing glowing reports of Caterham, and stinging stories on its rivals, makes the matter look all the more unfortunate regardless of whether his coverage was warranted.

Ironically the journalist in question has made false allegations that some of his peers are press officers of various F1-related outfits when at the same time he was keeping quiet about his position on the board of a company owned by a team owner. Pitpass has only given cursory mention to this messy situation because it was nothing more than an esoteric F1 development. However, the press release put it firmly under the public eye, particularly since it did not come from the team but from the car company itself and was distributed for the world to see. Such was the attention given to it that news about the release was at one stage trending on Twitter.

It is easy to see why this was the focus of the media reports about the Lotus release but it belies the much more important details contained within it.

The release confirmed two key pieces of news about the team initially revealed by Pitpass' business editor Christian Sylt. Firstly, last week we exclusively revealed that Group Lotus' owner Proton has given a huge loan (estimated at £35m) to Lotus F1 and all the team's assets are secured on it. Following the revelation, Lotus F1's ultimate owner Gerard Lopez told Autosport.com that "the obligations of Lotus have been terminated." This was interpreted by the reporter as the team having "ended its formal relationship with the marque." However, in fact, this was far from the case.

We followed up our revelation about the loan by publishing the actual loan documents which were subsequently appropriated by a more scurrilous website claiming that they are "confidential" and "leaked". The Lotus Cars press release endorsed our report by confirming the existence of the loan and security of the team's assets. The only difference was that that the loan amount is actually £30m which shows you just how close Sylt's estimates really are.

The formal revelation of the loan in the Lotus Cars release seems to go head on with Lopez' comment that "the obligations of Lotus have been terminated." That's not all. Last month Sylt revealed that Proton had an option to acquire 50% of the team. Lopez' comments confirmed Sylt's exclusive news as he admitted that there was indeed an option to buy 50% of the team. However, he added that the "option was taken over by us. There was one, but we have taken it over now."

As Pitpass pointed out, the fact that Proton's loan is secured on all of the team's assets seems to make it a little irrelevant that it no longer has an option to buy 50% of the outfit. However, the Lotus Cars release reveals that "Proton retains the rights to purchase 10% of the F1 team. Another 10% share option will be activated if the team default on their loan obligations with Proton." There was no mention whatsoever of this in the report of Lopez' comments and it is interesting that it has taken Lotus Cars to set the record straight.

In our original report about the Proton loan we claimed that despite the new developments, "in fact very little has changed." Group Lotus is still lending its name to Lotus F1 and instead of paying sponsorship to it, the company's parent has given a loan. Likewise, instead of Lotus having an option to buy 50% of the team, its parent now has the right to acquire 10% of the F1 team with another 10% becoming due if it defaults on the loan. The bottom line is that if you look behind all the fuss and bluster this is nothing more than a storm in a teacup.

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