Renault borrows to stay in Formula 1 fast lane
Renault's Formula One team has taken out a loan from one of the biggest banks in Eastern Europe, Lithuania's AB Snoras, to help it stay on track after losing more than £50 million in sponsorship over the past 12 months.
After Sunday's Korean Grand Prix the team lies in fifth place — three higher than it finished last year. It suffered multiple breakdowns off-track in 2009 culminating in its eighth place ranking, which was the worst since Renault bought the team from clothing company Benetton in 2000.
In August last year, the Oxfordshire-based team was rocked by accusations that its boss Flavio Briatore had rigged the result of the 2008 Singapore Grand Prix by ordering his driver Nelson Piquet Jnr to crash.
In the wake of the scandal Briatore left the team followed by its lead driver, the two-time world champion Fernando Alonso. Then there was an exodus of sponsors including Spanish insurance company Mutua Madrilena, Pepe Jeans and Dutch bank ING, which alone was believed to be paying £40m annually. This led to Renault selling a 75% stake in the team in December last year to a group led by Luxembourg-based businessman Gerard Lopez who was one of the early investors in Skype.
Despite becoming a minority shareholder, Renault still provides considerable support to the team and, according to F1's industry guide Formula Money, it spends £38m supplying its cars with 2.4 litre V8 engines.
It's not known when the loan has to be repaid by but it is clear that if the team fails to repay, Snoras could call in its security and take control of it.
