The new owner of Group Lotus parent Proton is currently evaluating strategies for the UK-based sportscar and engineering services unit amid reports that a sale or the firm entering administration in Britain are under consideration.
A spokesperson for Lotus today confirmed that a review is taking place: “The new Proton owners DRB-Hicom are currently in the middle of their due diligence of Group Lotus. There have been and continue to be positive discussions between Group Lotus senior management and senior management at DRB-Hicom both here in Hethel and in Malaysia.”
Malaysia-based DRB-Hicom (a car distributor and assembler) is reportedly considering the sale of Lotus as one option. However, industry sources maintain that Lotus’ accumulated debt – estimated at around GBP200m – work against finding a buyer and make sending it into administration to remove the debt another option.
That suggestion is refuted by Lotus.
“Despite various rumours in the media to the contrary, at no point has DRB-Hicom indicated to Group Lotus that they intend to put the company into administration and we welcome the opportunity to put that rumour along with incorrect speculation that production has stopped, that Dany Bahar is no longer CEO and that we are no longer involved in F1, to bed,” the spokesperson said.
However, the spokesperson acknowledged that the company is going through “a very difficult time”.
“It’s no secret that we are going through a very difficult time at the moment due to the change in ownership but we’re doing everything we can to get through this period and come out the other side stronger than before. We’re very grateful for the continued support we receive from the people of Norfolk and all over the world,” the spokesperson added.
Reports also suggest that DRB-Hicom’s management is sceptical over Lotus’ ambitious plans for a raft of new models as part of a five-year revival plan to turn the company into a ‘British Porsche’. A temporary financial freeze on Lotus product development spending was instituted when the change of ownership to Porsche was completed earlier this year. That has inevitably caused delay to the programme championed by CEO Dany Bahar.
Industry sources suggest that exploratory contacts with potential buyers for Lotus – some in China – have been taking place in recent weeks.
Meanwhile, there has also been speculation that the terms of the company’s Formula One deal with the Lotus branded team (formerly branded Renault-Lotus) owned by venture capital group Genii have recently been changed to downgrade the partnership. However, the Enstone (UK)-based team will continue to operate under the Lotus name this season and Lotus maintains that the arrangement between the two is best described as a ‘brand partnership’ rather than sponsorship.
“The F1 team uses the strength of the Lotus name to promote themselves, and in return Group Lotus benefits from F1 exposure and the ambassadorship of its drivers, and the deal is a non-cost one,” the Lotus spokesperson said.