British luxury carmaker McLaren gets $551mn from Saudi PIF & US-based Ares

By Shilpa Annie Joseph, Desk Reporter
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McLaren
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British automotive manufacturer McLaren Group has secured a $758 million equity investment, with most of the fund raised from Saudi Arabia’s Public Investment Fund (PIF) and global investment firm Ares Management.

Saudi PIF and US-based Ares will provide $551 million in the form of preference shares and equity warrants, according to McLaren. The remaining funds will come from existing shareholders in the form of convertible preference shares, allowing for repayment of a loan received in June last year from the National Bank of Bahrain.

McLaren Group comprises the British supercar maker as well as McLaren Racing, which competes in Formula One and IndyCar in the United States and is also entering the Extreme E off-road electric series next year.

According to its website, Bahrain’s Mumtalakat sovereign investment fund is McLaren’s main shareholder, with 62.55 percent ownership.

Paul Walsh
Paul Walsh
Executive Chairman
McLaren Group

“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. With these strong foundations now in place, we are well-positioned to achieve our ambitions as a global luxury supercar and elite motorsport business, with Automotive as McLaren’s core profit driver.”

McLaren had a $413 million (£300 million) equity injection from existing shareholders in March 2020 and completed a $234 million (£170 million) sale and leaseback deal on its Woking headquarters.

Furthermore, MSP Sports Capital, a New York-based investor firm, bought a significant minority stake in McLaren Racing in December for $255 million (185 million pounds), relieving pressure from the COVID-19 crisis.

According to the reports, “PIF was involved in a proposed takeover of Premier League football side Newcastle United by a Saudi Arabian-backed consortium last year. That deal ultimately collapsed after being delayed by the Premier League’s owners and directors test.”

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