Much of the new funding comes from the Saudi Arabian Public Investment Fund [PIF], with some coming from existing investors, including Mumtalakat from Bahrain.
McLaren says £ 400 million was raised in exchange for preferred stock by “global alternative investment manager” Ares Management and PIF.
Existing shareholders will be joined by what McLaren calls a “limited number of new private investors” who are investing an additional £ 150 million in convertible preferred stock.
McLaren says the deal will allow repayment of the loan received from the National Bank of Bahrain just over a year ago, noting that the conclusion of the agreements “remains subject to mutually agreed closing terms.”
Saudi Arabia has already established itself as an important partner of the F1 organization in sport through the petrochemical group Aramco.
The country will also host its first Grand Prix on the new Jeddah Street Track in December.
Aramco is one of many PIF-owned companies that has spent heavily internationally in recent years.
Lando Norris, McLaren MCL35M
Photo by: Alessio Morgese
It has declared holdings in a number of big names including Boeing, Disney, CitiCorp, Facebook, BP, and Marriott. Other companies in the portfolio are Uber, Tesla and Total.
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McLaren Group CEO Paul Walsh said: “Building on the short-term measures we took last summer in response to the global pandemic, McLaren has taken a number of important steps to put the company on a stable footing for the long term . with close support from their advisors and existing shareholders.
“Following the strategic investment in Racing that we completed last year, this successful equity increase is a key element of our comprehensive financial strategy to support the Group’s sustainable growth plans.”
Walsh made it clear that the road vehicle business will benefit from the new agreements: “With these strong foundations, we are well positioned to achieve our ambitions as a global luxury supercar and elite motorsport business with Automotive as the main driver of McLaren’s profits.”
“The strong investor appetite reflects continued confidence in McLaren’s iconic brand, industry leading technology and exciting long-term growth prospects, backed by a more focused strategy and a stronger, more efficient capital structure.
“We look forward to working with Ares and PIF as they bring their experience and knowledge to the board.”
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