McLaren gets financial boost from Saudi heritage fund
LONDON – McLaren Group has announced a Â£ 550million ($ 758million) equity investment, much of which comes from Saudi Arabia’s Public Investment Fund (PIF) and global investment firm Ares Management.
The McLaren Group includes the British supercar maker as well as McLaren Racing, which competes in Formula 1 and IndyCar in the United States and also enters the Extreme E all-terrain electric series next year.
PIF and Ares have provided $ 400 million in new capital, in the form of preferred stock and stock warrants, McLaren said Friday.
The remainder will come from existing shareholders in the form of convertible preferred shares, allowing repayment of a loan received in June last year from the National Bank of Bahrain.
Bahraini sovereign wealth fund Mumtalakat is McLaren’s majority shareholder with a 62.55% stake, according to its website.
“Following the strategic investment in Racing we secured last year, this successful capital increase is a key part of our overall financial strategy to support the group’s sustainable growth plans,” said Paul Walsh, executive chairman of McLaren group.
“With these strong foundations now in place, we are well positioned to realize our ambitions as a global luxury supercar and elite motorsport company, with the automotive industry as McLaren’s main profit driver.” said Walsh.
McLaren received a Â£ 300million equity injection from existing shareholders in March 2020 and last April entered into a Â£ 170million sale and leaseback agreement at its headquarters in Woking, England.
U.S. investment group MSP Sports Capital also acquired a significant minority stake in McLaren Racing last December in a deal that grossed Â£ 185million and eased pressure from the COVID-19 pandemic.
Auto revenues in the first quarter of this year were Â£ 171 million, an increase of 145% from the same pandemic-hit period in 2020.
PIF was involved in a plan to take over Premier League football team Newcastle United by a Saudi-backed consortium last year.
That deal ultimately fell apart after being delayed by the Premier League owners and directors test.