KUALA LUMPUR: PROTON HOLDINGS BHD [] has confirmed its unit Group Lotus plc is teaming up with Renault F1 Team Ltd for the title sponsorship of the Renault F1 Team which will take part in the Formula One World Racing Championship season beginning 2011 onwards.
'The said sponsorship is potentially for a period of seven years. However, Lotus will initially be paying a sponsorship fee, which is part of its approved ''15 million to ''20 million per year marketing budget, to be spread over a period of four years, in its ordinary course of business as part of Lotus' branding and marketing plan,' it said.
Proton said on Monday, Dec 13 this budgeted marketing spend forms part of the five year business turnaround plan approved by the boards of Proton and Lotus.
'Total forecast capital expenditure for the Lotus business turnaround plan is approximately GBP480 million which will be secured via internally generated and externally secured funding during the turnaround period. This is expected to deliver substantial returns on investment as deliberated and approved by the respective boards,' it said.
Proton said Lotus would further endeavor to reduce the amount as a result of the flexibility of the terms of the agreement between the parties.
'There is no additional outlay from Proton to Lotus to finance the deal,' it said.
Proton added the sponsorship would provide the privilege of an equity participation at a nominal value.
It added that equity would allow Lotus to maximise and exploit its marketing and branding to its full potential.
'The equity deal will also allow Lotus an opportunity to manage further financial exposure by having a say in the way the team is managed,' it said.
'The said sponsorship is potentially for a period of seven years. However, Lotus will initially be paying a sponsorship fee, which is part of its approved ''15 million to ''20 million per year marketing budget, to be spread over a period of four years, in its ordinary course of business as part of Lotus' branding and marketing plan,' it said.
Proton said on Monday, Dec 13 this budgeted marketing spend forms part of the five year business turnaround plan approved by the boards of Proton and Lotus.
'Total forecast capital expenditure for the Lotus business turnaround plan is approximately GBP480 million which will be secured via internally generated and externally secured funding during the turnaround period. This is expected to deliver substantial returns on investment as deliberated and approved by the respective boards,' it said.
Proton said Lotus would further endeavor to reduce the amount as a result of the flexibility of the terms of the agreement between the parties.
'There is no additional outlay from Proton to Lotus to finance the deal,' it said.
Proton added the sponsorship would provide the privilege of an equity participation at a nominal value.
It added that equity would allow Lotus to maximise and exploit its marketing and branding to its full potential.
'The equity deal will also allow Lotus an opportunity to manage further financial exposure by having a say in the way the team is managed,' it said.
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