Buyout of Lotus runs into a snag

THE BRAKES have been slammed on a buyout of Lotus, the Norfolk-based sports car maker, after its management failed to agree terms with General Motors, the company's increasingly unhappy parent, writes Tom Stevenson.

A spokesman for the US car giant's European operation in Zurich said yesterday: 'The MBO team has revised its position. GM is considering its alternatives in the light of the revised proposal.'

Adrian Palmer, managing director of Group Lotus and head of the buyout team, was not available for comment, but a spokesman said the 750-strong workforce was hopeful that the company still had a future.

The buyout is thought to have foundered after the two sides failed to agree on a valuation for Lotus. GM is understood, however, to be negotiating with third parties who want to continue running the company in its present form.

Mr Palmer said in April that he had reached preliminary agreement on the buyout. He expected final completion within six weeks, although no definitive agreement had been signed.

General Motors paid pounds 22m for Lotus in 1986. Results for 1991 showed a pre- tax deficit of pounds 14.7m. Last year's figures are expected to be at least as poor.