Renault is in the process of selling most of its Formula One team to Genii Capital, a Luxemburg based firm specialized in new technologies, brand management and motor sport.
The letter of intent signed by the two companies calls for the deal to close in early 2010. At that time ownership of its racing shops in the United Kingdom would go to Genii.
However, the new team retains the Renault name for the 2010 season. And Renault will also continue to supply engines through its subsidiary in Viry-Châtillon to Red Bull Racing next season. Thus, Renault’s presence in what some maintain is the preeminent motor sport series is retained after 35 years of competition. Renault won the series as recently as 2005 and 2006.
Speculation says that the Renault stake in the new team will be about 20%, and the sale should cut its costs by at least half. Formula One teams can easily consume more than $500 million to operate for a single season.
The latest development followed months of speculation that Renault would quit the scandal-ridden sport, including race fixing by Renault in 2008, which cost it major sponsors, and follows the withdrawal of Toyota, Honda, Bridgestone, and BMW.
The decision was debated at Renault’s latest Board of Directors meeting as the loss-making company struggles with the ongoing negative effects of the Great Recession.