McLaren Group Ltd. has turned to its shareholders once again to keep the company afloat as the British luxury carmaker pushes its latest model to market.
The company has received commitments for £125 million ($150 million) of convertible preference shares from its owners, according to a statement on Wednesday. An initial £80 million has already been made available.
Shareholders include Bahrain’s sovereign wealth fund Mumtalakat, investment firm Ares Management Corporation and Saudi Arabia’s Public Investment Fund.
McLaren has struggled to recover from the pandemic and faced delays in launching its newest supercar, the Artura. The company’s available cash plunged 56% since the start to the year, dropping to £58 million at the end of the first quarter.
The commitments should be enough to get McLaren through the 2022 fiscal year, “yet leave open the possibility of additional financial flexibility needs in 2023,” said Joel Levington, director of credit research at Bloomberg Intelligence. “The action is consistent with our neutral views of the bonds, as well as our take that a potential IPO or sale to Audi or BMW doesn’t appear imminent.”
McLaren’s $620 million of junk-rated bonds maturing in 2026 are currently quoted at about 79 cents on the dollar, according to CBBT pricing compiled by Bloomberg.
McLaren has sought emergency financing multiple times over the past few years from shareholders. In July 2020, the company was on the brink of running out of money before getting a £150 million injection, thanks to a loan by Mumtalakat-linked National Bank of Bahrain.
A year later, a further £550 million investment in the form of preferred equity came from Mumtalakat and new investors Areas and PIF.
–With assistance from Lucca de Paoli and Irene García Pérez
