McLaren Group reportedly is in talks to raise hundreds of millions of pounds in new funding aimed at steering the British-based company into the electric vehicle era.
The UK’s Sky News said McLaren had opened talks with existing shareholders, including the sovereign wealth funds of Bahrain and Saudi Arabia, about injecting at least GBP250m into the business in coming months.
A final figure had yet to be determined, and one insider told the tv channel it was likely to be higher than GBP250m as the company wanted to boost its balance sheet until the end of the decade.
The report said news of the potential scale of the fundraising, on which investment bankers at Lazard had been drafted in to advise, came after McLaren was hit by delivery delays on its new Artura hybrid supercar.
Although the new vehicle had received positive reviews, McLaren reportedly was having to implement what it described as “technical upgrades to ensure Artura customers enjoy optimum long-term performance”.
These upgrades had been affected by supply chain delays hampering global automotive production, forcing the Woking-based company to slow production and customer deliveries of the Artura until the end of the month.
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One Sky News source said, regardless of the Artura issues, McLaren had always planned to engage with investors about implementing “the right capital structure to support our long-term growth strategy and business plan”.
The report said both Mumtalakat Holding, a long-standing McLaren shareholder, and Saudi’s Public Investment Fund, were expected to commit to the new capital raising. Ares Management, another McLaren investor, was also likely to be involved.
Sky News noted it had also emerged Mumtalakat had acquired part of McLaren’s valuable heritage car collection as part of a further GBP100m financial commitment to the business.
Insiders told the channel the impending fundraising of at least GBP250m was in addition to that GBP100m.
The report noted that, on a third quarter earnings call this week, McLaren said it was in “in active talks with all shareholders regarding a recapitalisation of the group”, although it did not elaborate on the size or structure of a prospective deal.
Sky News said it was unclear whether the new funds would be provided in equity although financial restructuring experts were also said to be involved in the situation. The funds would be entirely earmarked for McLaren Automotive with its racing subsidiary now a standalone entity within the group and not in need of additional financial support.
Sky noted also that Paul Walsh, the former Diageo chief who joined in 2020 as executive chairman, had overseen the sale of a stake in McLaren Racing to a separate group of investors as well as a GBP170m sale and leaseback of its spectacular Surrey headquarters while, last year, it had also sold McLaren Applied Technologies which generates revenue from sales to corporate customers.
McLaren had declined to comment further on its fundraising talks, Sky News said.