Could Aston Martin bail out Lotus?

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SONY DSC

Published Oct 31, 2012

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One of the wilder rumours coming out of the cybergarage recently has been that Aston Martin might be willing to lend a hand to ailing fellow British sports-car maker Lotus.

Ever since Lotus' parent company Proton was taken over by DRB-Hicom in January, which was followed almost immediately by the axing of charismatic CEO Dany Bahar, the company has been in a holding pattern, leaking money by the month.

Lack of funds has halted development of the new Esprit, and sales of the Elise, Exige and Evora are simply not enough to pay their suppliers and keep the company ticking over.

MOUNTAIN OF DEBT

On the face of it, a tie-up with Aston Martin seems like a good idea, according to a report in Automobile. The luxury carmaker needs smaller models to lighten its carbon footprint and Lotus' light, nimble sportsters would complement the V8 and V12 offerings from Gaydon very nicely.

But, it points out, given Lotus' mountain of debt - estimated at £250 million (R3.5 billion) - it would not be so much a merger as a bailout.

INVESTOR NEEDED

The two carmakers would need to find an outside investor willing to put in more than £700 million (R9.5 billion) to pay off Lotus' creditors, kick-start the desperately needed Esprit and keep both companies running until synergies of planning and production begin to pay off.

And in the current economic climate (which is frosty, to put it mildly) that's a big ask. Impossible? No, but very unlikely, says Automobile and, sadly, we have to agree.

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