Renault has given a €20m (£18m) loan to its Formula One racing team in an attempt to boost its chances of challenging for the world championship, which begins today in Bahrain.
The French team last won the title in 2006 and has had a rocky road for the past 12 months. The problems began in February last year when Dutch bank ING announced that it would stop its estimated $65m (£43m) annual sponsorship at the end of 2009. This was followed by the team's boss, Flavio Briatore, being banned from the sport in September in a scandal over the fixing of the Singapore Grand Prix. The ban has been overturned in court.
Then the team's lead driver, Fernando Alonso, left to join rival Ferrari at the end of 2009 and in December Renault sold an undisclosed stake to Luxembourg-based Genii Capital which is chaired by Gerard Lopez.
According to F1's industry monitor, Formula Money, Renault has cut its costs by $100m through the sale. Its investment now stands at around $60m.
The loan is secured on the assets owned by the team in Oxfordshire which was valued at £35.2m at the end of 2008. Accordingly, if the team fails to repay the loan, Renault will get back full ownership of the team. This security was key to Renault providing the loan despite its own finances being bleak with the car company making a net loss of €3.1bn last year.Reuse content