Gulf governments take bigger share of McLaren supercar group

Gulf sovereign wealth funds increased their stakes in the McLaren automotive group, with Saudi Arabia’s Public Investment Fund (PIF) taking over from Bahrain’s Mumtalakat as a shareholder.

McLaren is best known as a producer of luxury supercars and for competing in Formula 1 and IndyCar races.

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The group has announced in recent days that it has raised £ 550m ($ 757m) in new capital, including £ 400m in preferred shares of alternative investment manager Ares Management Corporation and the Saudi government’s PIF.

Existing shareholders, including Mumtalakat and a number of new private investors, are also investing an additional £ 150million in convertible preferred shares, to enable repayment of a loan received in June 2020 from the National Bank of Bahrain.

The company said fundraising operations are subject to certain conditions, including raising new senior secured finance to refinance existing debt.

It is not clear how much equity fundraising involves. In April of this year, the group’s largest shareholder was Mumtalakat, who owned 56% of McLaren Group’s common stock and 68% of its preferred stock.

The second largest shareholder was TAG Group, which owned 14% of McLaren’s common stock and 14.5% of the preferred stock.

Pandemic financing

McLaren’s new fundraiser is the latest in a series of deals for the group as it tries to deal with the impact of the Covid-19 pandemic.

In June 2020, McLaren announced that it had secured £ 150million in funding without naming the source. It later emerged that the money had been in the form of a 12-month loan from the National Bank of Bahrain (NBB), 44% owned by Mumtalakat. In August, McLaren announced its intention to raise equity “in the near future in order to subscribe to this short-term financing”.

In December of last year, US sports investment group MSP Sports Capital and other investors acquired a significant minority stake in McLaren’s racing division.

In April of this year, McLaren announced a sale and leaseback of its head office in Woking, in order to raise additional capital.

Last year, McLaren withdrew its sponsorship from the Bahrain McLaren professional cycling team after one season. The team has since been rebranded as Bahrain Victorious and has enjoyed an eventful Tour de France, which ends today – with three stage wins at the time of writing as well as an investigation into doping allegations.

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