Renault says it will stay in Formula 1


PARIS (AP) — Renault is staying in Formula One racing after agreeing Wednesday to sell a "large stake" in the team to a private investment firm to keep the cars on the grid in 2010.

The French carmaker had been weighing whether to pull out of F1 following a crash scandal that led to the departure of former team principal Flavio Briatore.

After the proposed sale to Luxembourg-based Genii Capital, Renault said in a statement that the two companies would operate the team together. The team will still race under the Renault name, using Renault engines.

Neither Renault nor Genii elaborated on the size of the stake to be sold, though reports said it could be as high as 80 percent.

"In 2010, the team will retain its name, its identity and the core ingredients that led to the successes achieved in 2005 and 2006," Renault said. "The team will continue to be supplied with engines by its sister company in Viry-Chatillon."

The companies said a letter of intent should be concluded next year.

Renault’s reputation was recently damaged by the crash scandal, which caused it to lose sponsorship deals with insurance companies Mutua Madrilena and ING, and there had been speculation that Renault would follow Honda, BMW and Toyota out of F1 due to the economic downturn.

At the 2008 Singapore Grand Prix, Renault driver Nelson Piquet Jr. purposely crashed his car to help teammate Fernando Alonso, who went on to win the race.

Gerard Lopez, the businessman behind Genii Capital, said restrictions on spending in F1 had made it a more attractive investment for new owners.

"This is a period of opportunity for Formula One, not a period of uncertainty," Lopez said. "Formula One has an extraordinary level of global awareness that can be used to develop new business-to-business opportunities in traditional and developing markets, and there are exciting new revenue streams to be explored."

Genii said it intended to run the team on a restricted-budget model, similar to that of new team Virgin Racing.

"Together with Renault, we intend to run the team with the same values as any of our other investments, prioritizing ambitious performance targets without neglecting cost efficiency," Genii chief executive Eric Lux said. "We strongly believe that on-track performance can be compatible with business performance, and we will use all our entrepreneurial spirit and commercial know-how to achieve this goal.

Renault also said it will continue as engine supplier for Red Bull next season.