The McLaren Group is set to receive a timely influx of cash from Saudi Arabia’s Public Investment Fund and existing and new shareholders.
Saudi Arabia’s PIF and global investment firm Ares management are expected to contribute £400m of new capital to the automotive company while existing and new shareholders – including majority shareholder Mumtalakat – will invest £150m in the form of Convertible Preference Shares.
As of Friday, the equity raise was still in the process of being finalized.
McLaren said that the deal will allow for the repayment of the loan received in June 2020 from the National Bank of Bahrain and the right-sizing of the capital structure, while the transaction will offer significant deleveraging opportunities for the business.
The McLaren Group, the main shareholder in McLaren Racing, has suffered a significant shortfall in sales since the onslaught of the Covid-19 pandemic at the start of 2020.
But sales of its prestigious super cars have rebounded this year, boosting the confidence of investors in the company’s prospects under the leadership of executive chairman Paul Walsh.
As a reminder, McLaren was the reciepient of a £300m injection from existing shareholders in March 2020, and last April the company completed a £170m pound sale and leaseback deal on its Woking headquarters.
“Building on the short-term measures that we put in place last summer in response to the global pandemic, McLaren has taken a number of significant steps to put the company on a stable footing for the long-term, with the close support of its advisors and existing shareholders,” commented Walsh.
“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.
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“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.
“The strong appetite we have seen from investors reflects the continued confidence in McLaren’s iconic brand, industry-leading technology and exciting long term growth prospects, underpinned by a more focused strategy and a stronger, more efficient capital structure.
“We look forward to working with Ares and PIF as they contribute their experience and knowledge to the board.”
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