PIF buys into McLaren as part of $758m equity raise
Bahrain’s Mumtalakat sovereign investment fund is the group’s majority shareholder
The McLaren Group announced a £550 million ($758 million) equity investment on Friday with much of it coming from Saudi Arabia’s Public Investment Fund (PIF) and global investment firm Ares Management.
McLaren Group includes the British supercar maker as well as McLaren Racing, which competes in F1 and IndyCar in the US and is also entering the Extreme E off-road electric series next year.
McLaren said PIF and Ares were providing £400 million of new capital, in the form of preference shares and equity warrants.
The rest will come from existing shareholders as convertible preference shares, allowing for repayment of a loan received in June last year from the National Bank of Bahrain.
Bahrain’s Mumtalakat sovereign investment fund is McLaren’s majority shareholder with a 62.55 percent stake according to its website.
“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,” said Paul Walsh, McLaren Group’s executive chairman.
“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 £300 million equity injection from existing shareholders in March 2020 and last April completed a £170 million sale and leaseback deal on its Woking headquarters.
US-based investment group MSP Sports Capital also acquired a significant minority stake in McLaren Racing last December in a deal that brought in £185 million and eased pressure from the coronavirus disease (COVID19) pandemic. Automotive revenues in the first quarter of this year were £170.5 million, a rise of 145 percent on the same pandemic-affected period in 2020.
While PIF’s investment in McLaren represents the first by the Kingdom, Saudi Arabia has a long relationship with the company.
Saudi billionaire Mansour Ojjeh, who died in June this year at the age of 68, bought into McLaren in 1984 and helped the team win seven of its eight F1 titles.
McLaren CEO Zak Brown said: “Mansour has been etched into the heart and soul of this team for nearly 40 years and was intrinsic to its success.”
The Middle East is an important market for McLaren’s road cars. McLaren Automotive inaugurated a new service center, located on King Abdul Aziz Road in Riyadh, in February of this year.
With these strong foundations now in place, we are well positioned to achieve our ambitions as a global luxury supercar and elite motorsport business.
Paul Walsh
McLaren Group’s executive chairman