Saudis buy stake in McLaren

London — The McLaren Group has received a £550m equity investment with much of it coming from Saudi Arabia’s Public Investment Fund 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 US and is also entering the Extreme E off-road electric series next year.

McLaren said Saudi Arabia’s Public Investment Fund and Ares were providing £400m of new capital, in the form of preference shares and equity warrants.

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% 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 executive chair Paul Walsh.

McLaren had a £300m equity injection from existing shareholders in March 2020 and last April completed a £170m sale and leaseback deal on its Woking headquarters.

US-based investment group MSP Sports Capital also acquired a minority stake in McLaren Racing last December in a deal that brought in £185m and eased pressure from the Covid-19 pandemic.

McLaren has been hard hit by the pandemic and last year cut 1,200 jobs, a quarter of its workforce.

Sales of McLaren’s sports cars have rebounded strongly in recent months, and its racing fortunes have recovered with its driver Lando Norris lying third in the Formula One championship.

The company’s automotive revenues in the first quarter of this year were £170.5m, a rise of 145% on the same pandemic-affected period in 2020.

Reuters