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Property magnate fuels Lotus' F1 title campaign

NEWS STORY
25/03/2013

For the past six months rumours have been swirling around that the Lotus F1 team was looking for new investment. Stories behind the scenes suggested that it was in financial difficulty and although no hard evidence of this ever came to light, the owners' desire to exit became very clear. According to a news story in the Telegraph by Pitpass' business editor Christian Sylt, they now have a potential exit route.

Lotus is on a roll at the moment after Kimi Raikkonen won the season-opening Australian Grand Prix following his third place in the championship last year. The team has even higher ambitions and Sylt's report reveals that in a bid to achieve them last month it appointed to its board Andrew Ruhan, one of Britain's most successful property investors.

Ruhan made his name in 1998 when he bought the former Financial Times{/} print works in East London and turned the building into a telecoms data centre. Further investments in computer systems warehouses followed and as boss of data centre operator Sentrum he spearheaded the sale of three facilities to American company Digital Realty for £720m ($1.1bn) in June last year. He is no stranger to motorsport either as he is a keen amateur sports car racer who won the GT Cup championship in 2011.

Ruhan has not invested in the team but he presents the exit route which Lotus is looking for. The team is wholly-owned by private equity firm Genii Capital which was founded by Gerard Lopez, an early investor in Skype. In January he said "if there are investors who want to enter with some shares we are ready."

Lotus team boss Eric Boullier revealed to Sylt that "Andrew Ruhan was indeed recently appointed as a director to the board of Lotus F1 Team limited. He is bringing his business acumen to the table and his passion for and knowledge of the Formula One industry but there is no financial backing involved as far as I am aware."

The Lotus car company is a partner of the team and in October last year it was rumoured that the marque's Malaysian parent Proton would buy into the F1 outfit. However, this was denied and Boullier recently said that Genii has "showed their commitment and they will commit in the future to financially back this team."

Raikkonen's performance last year gave Lotus the best value for money of all F1 teams. It spent an average of £360,000 ($550,000) on each of the points it scored compared to £450,000 ($680,000) for Red Bull Racing which won the championship.

Lotus' latest accounts are for the year-ending 31 December 2011 and show that it burned up a £20.8m pre-tax loss despite revenue accelerating 41% to £115.7m. Although its costs increased £12.1m to £134.4m this was a long way off the £176.2m spent by Red Bull which is why Lotus is F1's value for money champion.

It remains to be seen whether Ruhan will give it a financial boost but there is no doubt that he is on pole position to do so.

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