Saudi wealth fund sells majority stake in McLaren to their Bahrain counterparts
Bahrain's sovereign wealth fund buys McLaren shares from the Saudi Public Investment Fund (PIF).
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McLaren (Image via Formu1a.uno)
Mumtalakat, the sovereign wealth fund of Bahrain, has strengthened its hold on McLaren. They bought the shares of the McLaren Group from the Saudi Public Investment Fund (PIF) and Ares Management. Mumtalakat revealed that it had purchased the shares on Thursday. However, the financial terms were not disclosed. This private transaction between the shareholders does not mean new money will be injected into the company.
Sky News reported that this deal comes two years after PIF and Ares had invested £400m ($510m) in McLaren to raise funds for the long term. The move expands Bahrain’s stake in McLaren, including McLaren Racing and the British supercar maker. This deal helps simplify the capital structure and would make it easier for new owners in the coming months. PIF’s exit from the Woking based manufacturer comes when it has become one of the world’s leading stated-backed funds.
The global and domestic investor PIF focuses on strengthening its domestic football league. They have already brought in some of the world’s best footballers. Meanwhile, Mumtalakat claims its McLaren restructuring “as the optimal governance structure to deliver McLaren’s Future of Performance strategy.” McLaren hopes to enhance its financial position in the upcoming months, and Mumtalakat will likely open up its pockets.
McLaren hopes to stabilize the company soon
Months ago, the McLaren group obtained £70m in funding from its investors as part of its restructuring plan by nudging it into the electric vehicle side.
The Woking-based manufacturer has heavy competition with Lamborghini and Ferrari. Hence, McLaren hopes to raise funds to stabilize the company by investing in new models. The company had already been affected by its Artura hybrid supercar delay. Technical upgrades impacted the supply chain and hampered car production.
End of last year, Mumtalakat acquired McLaren’s prestigious car collection as part of an additional £100m financial commitment. Recently, funds were designated for investment in McLaren. However, this does not include the McLaren F1 team, as it is a separate entity within the group.
Michael Leiters, a former Ferrari executive, was named McLaren’s road car division’s boss last year. He spoke at the Future of the Car summit in May. Leiters stated they have to develop their future line-up and get profitable.
The company had a bad run as they reported a pre-tax loss last year. This was due to its delays, cost inflation, and supply limitations. In March, investors presented another £70m to help the company. There is an important recapitalization plan for the upcoming months where they could sell new equity.
On the other hand, PIF already made deals with several luxury automotive companies. They even bought a stake in Aston Martin last year. McLaren and Mumtalakat have not commented yet, and PIF cannot be reached.
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Sugantha Meena
(493 Articles Published)