Published on July 19th, 2021 | by Daniel Sherman Fernandez0
McLaren Gets Much Needed USD758 Million Funding From Saudi
Yes, despite growing sales, McLaren needed this boost from the Middle East.
After so many years and so much success in motorsports and customer engagements, the McLaren Group still needs cash injections? Even after McLaren Automotive concluded a successful weekend at the 2021 Goodwood Festival of Speed with a sensational victory for the 720S GT3X in the Timed Shootout Final?
Reuters has just reported that the McLaren Group announced a 550 million pound (USD758 million) equity investment, with much of it coming from Saudi Arabia’s Public Investment Fund (PIF) and global investment firm Ares Management.
McLaren Group includes the British supercar maker as well as McLaren Racing, which competes in Formula One and IndyCar in the United States and is also entering the Extreme E off-road electric series next year.
PIF and Ares were providing 400 million of new capital, in the form of preference shares and equity warrants, McLaren said on Friday.
The rest will come from existing shareholders as convertible preference shares, allowing for repayment of a loan received in June last year from the National Bank of Bahrain.
Bahrain’s Mumtalakat sovereign investment fund is McLaren’s majority shareholder with a 62.55 percent stake, according to its website.
“Following the strategic investment into Racing that we secured last year, this successful equity raise is a key element of our comprehensive financial strategy to support the Group’s sustainable growth plans,” said McLaren Group’s executive chairman Paul Walsh.
“With these strong foundations now in place, we are well positioned to achieve our ambitions as a global luxury supercar and elite motorsport business, with Automotive as McLaren’s core profit driver.” Walsh said.
March 2021 saw the highest volume of customers return to the market and purchase a new vehicle in the last ten years, signaling their eagerness to help the automotive industry recover from the Coronavirus pandemic.
McLaren had a 300-million-pound equity injection from existing shareholders in March 2020 and last April completed a 170-million-pound sale and leaseback deal on its headquarters in Woking, England.
U.S.-based investment group MSP Sports Capital also acquired a significant minority stake in McLaren Racing last December in a deal that brought in 185 million pounds and eased pressure from the COVID-19 pandemic.
Automotive revenues in the first quarter of this year were 171 million pounds, a rise of 145 percent on the same pandemic-affected period in 2020.
PIF were involved in a proposed takeover of Premier League soccer side Newcastle United by a Saudi Arabian-backed consortium last year.
That deal ultimately collapsed after being delayed by the Premier League’s owners and directors test.