A Lola chassis

A Lola chassis

British engineering firm and race car constructor Lola, established in 1958 and based in Huntingdon, England, has announced today that it is suffering from severe cashflow problems and has appointed an administrator.

The company, which includes a separate composites division and also works with numerous companies outside of motorsports, released the following statement and said it will wait until May 21 before revealing any further details of its situation.

"Lola Cars International Ltd was formed in 1958. 

In recent years, significant investment has been made in technology and capability in the motorsports business as well as diversifying and creating Lola Composites Limited, serving the defence, aerospace, communications, renewable energy, automotive and motorsports markets.

The latest economic downturn and the decision of Her Majesty's Revenue and Customs (HMRC) not to pay ongoing R&D tax credits has caused a serious cashflow problem for the businesses.

It is with enormous regret that a decision has been taken to issue Notices of intention to appoint an Administrator to Lola Cars International Limited and Lola Composites Limited.  This step allows the board to continue its discussions with possible investors and prospective purchasers with a view to securing the best outcome for the staff, creditors and customers of both businesses."

Lola was branching out into the development of electric race cars, teaming up with BAE Systems and Drayson to develop an electric Le Mans prototype. The company has also suffered several failed attempts to get back into Formula 1 racing with its own team and more recently lost out becoming a chassis supplier for Indycar to rival firm Dallara.

Stay tuned for Lola's further announcement due next week.