Renault agrees deal to keep team on track

Renault are staying in Formula One after agreeing yesterday to sell a "large stake" in the team to a private investment firm to keep the cars on the grid next year.

The French carmaker had been weighing up whether to continue in the sport or pull out following the "crashgate" scandal that led to the departure of former team principal Flavio Briatore in September.

After the proposed sale to Luxembourg-based Genii Capital, Renault said in a statement that the two companies would operate the team together under the Renault name, using Renault engines. Neither Renault nor Genii elaborated on the size of the stake to be sold, though reports said it could be as high as 80 per cent.

"In 2010, the team will retain its name, its identity and the core ingredients that led to the successes achieved in 2005 and 2006," Renault said. "The team will continue to be supplied with engines by its sister company in Viry-Chatillon."

Renault's reputation was recently damaged by the 2008 crash scandal, which caused it to lose sponsorship deals with insurance companies Mutua Madrilena and ING, and there had been speculation that they would follow Honda, BMW and Toyota out of Formula One due to the economic downturn.

Gerard Lopez, the businessman behind Genii Capital, said restrictions on spending in Formual One had made it a more attractive investment for new owners. "This is a period of opportunity for Formula One, not a period of uncertainty," Lopez said. "Formula One has an extraordinary level of global awareness that can be used to develop new business-to-business opportunities in traditional and developing markets, and there are exciting new revenue streams to be explored."

Genii said it intended to run the team on a restricted-budget model, similar to that of the newly launched Virgin Racing. Renault also said it will continue as engine supplier for Red Bull next season.