McLaren gets over £100m capital injection to head for new road cars

Wednesday 20 July 2022 15:00 BST

The McLaren Group is set to secure a new injection of funding worth over £100million as it races to get its latest supercar models into full production.

Sky News has learned that the British carmaker is close to finalizing a further capital raise which will give it access to at least £80m of additional capital, which insiders said was a mark of confidence from the company. from existing investors.

McLaren shareholders, including Saudi Arabia’s Public Investment Fund (PIF) sovereign vehicle and its Bahrain-based counterpart Mumtalakat, are expected to be among those backing the latest fundraising.

A person close to an investor said it could be finalized as early as Wednesday evening.

The new funding is being raised to help deliver new McLaren road cars at a time when the global automotive industry is under pressure from supply chain challenges and economic headwinds.

The Artura, a McLaren hybrid supercar, has received a series of positive reviews and is expected to be followed in the coming years by a series of other new models reflecting the industry’s move towards electrification.

News of the latest fundraising comes just days after the Saudi PIF became a significant minority shareholder in Aston Martin as part of a broader balance sheet boost.

This means that the Saudi public investment fund holds powerful positions as a shareholder of the two most renowned luxury car names in the UK.

Earlier this year, McLaren appointed former Ferrari executive Michael Leiters as head of its road car division.

The UK group’s financial performance recovered after the height of the pandemic, when it was forced into a far-reaching restructuring that saw hundreds of jobs cut and substantial sums raised in equity and debt to repair its balance sheet.

McLaren has reported strong demand for its limited-production cars, including the 765LT Coupe and Spider, both of which are sold out.

It also reported a strong order book for its new hybrid supercar, the Artura, the first vehicles of which are expected to be delivered in June.

In its racing division, which includes Formula 1 cars driven by Lando Norris and Daniel Ricciardo, McLaren has also seen a turnaround under Zak Brown, who leads that arm of the business.

He also announced his entry into Extreme-E and signed sponsors such as Google, the internet search division of tech giant Alphabet, and Neom, the Saudi desert city being built at astronomical cost.

There has been persistent speculation in the industry this year that McLaren could be the subject of a takeover bid from Audi, the German manufacturer, although no such talks are ongoing.

McLaren has undertaken a series of corporate transactions since the start of the pandemic, when it applied for a government loan – a request that was turned down by ministers.

Paul Walsh, the former Diageo chief who joined in 2020 as executive chairman, oversaw the sale of a stake in McLaren Racing to a separate group of investors, as well as a $170 million sale-leaseback. pounds sterling from its spectacular Surrey headquarters.

Last year it also sold McLaren Applied Technologies, which generates revenue through sales to corporate clients.

Founded in 1963 by Bruce McLaren, it is one of the most famous names in British motorsport.

In half a century of F1 competition, he won the constructors’ championship eight times, while his drivers included Mika Hakkinen, Lewis Hamilton, Alain Prost and Ayrton Senna.

In total, the team won 180 Grands Prix, three Indianopolis 500s and the 24 Hours of Le Mans in its debut.

McLaren’s track operations account for around 20% of the group’s annual revenue.

The company saw its separate divisions reunited following the departure in 2017 of Ron Dennis, the veteran McLaren boss who had led his F1 team through the most successful period in its history.

He became one of Britain’s best-known businessmen, expanding McLaren’s technology businesses into a wide range of other industries through lucrative business partnerships.

Mr Dennis has offloaded his stake in a £275m deal following a bitter dispute with other shareholders.

McLaren declined to comment.

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