F1: Lotus PDVSA money being held up

The Lotus Formula 1 team's current financial crisis stems from it being unable to invoice key sponsor PDVSA due to ongoing negotiations with Renault.

Lotus's board is this week due to accept an offer from Renault of $100 million for a 65 percent stake in the organization following apresentation meeting between the parties held on Monday. The takeover will end the uncertainty surrounding the debt-ridden team, which was last under Renault ownership in 2010, and guarantee the futures of the 400 staff members.

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The last few months have been particularly troubling as the team has effectively been in a state of financial lockdown due to a period of due diligence on the deal. Following the Belgian Grand Prix Lotus's trackside director of operations Alan Permane remarked: "This is the worst season we've had financially, no doubt. We've had to scrimp and scrape for parts, and to get the parts on the track is a massive effort each week."

It was at Spa the team's cars and equipment were impounded post-race by local court-appointed bailiffs due to a dispute with former reserve Charles Pic. The team has also faced winding-up petitions in Britain's High Court of late following claims by a number of creditors.

Lotus is currently sitting on a $50 million invoice to PDVSA, Venezuela's state-owned oil and gas giant, for the services of Pastor Maldonado. PDVSA pays the money in advance in late July/early August ahead of Maldonado's drive the following year. But despite the fact Maldonado has a contract for 2016, the Renault takeover means his future is uncertain at this stage, and so the invoice has been put on hold.

Without the money from PDVSA for Maldonado, Lotus has been unable to pay its bills or invest in the development of the car, which still scored a superb third at Spa with Romain Grosjean at the wheel.

Renault is evaluating its driver options and is first looking to speak to PDVSA and Total, Grosjean's primary backer, before committing to either man. It is believed Grosjean will ultimately be retained, while it is likely Renault will honor Maldonado's deal for 2016, with an option for '17.

Renault has aided Lotus's cause in part by opting not to take money owed to it by the team following the termination last year of the engine supply deal. As per the penalty clauses, Lotus has been paying a set sum of money to Renault per month, a figure deducted from the monthly income received from Formula One Management's prize fund based on the previous year's championship standings.

With Renault appreciating the fact its stance on Maldonado has placed Lotus in an awkward financial position until the completion of the takeover, the penalty payments have been suspended.

Originally on Autosport.com