|© AP Photo/Antonio Calanni
The Euskadi-Euskaltel cycling team says it has failed to strike a deal with Formula 1 driver Fernando Alonso for a takeover of the team, meaning it will have to fold.
The Basque team says in statement Monday that it is "obligated unfortunately to once again initiate an orderly shut-down process."
Alonso said last month he had reached an "agreement in principle" to rescue the 19-year-old financially stricken team.
Alonso was to provide funds to bridge a budget shortfall after Euskadi-Euskaltel lost €3.5 million ($4.7 million) of regional government funding due to austerity cuts prompted by Spain's financial crisis.
The team's principal sponsor, telecoms company Euskaltel, had previously provided a majority of the team's €9-million annual budget.