McLaren Group is a British motorsport, automotive, and technology company that manufactures sports cars and supercars. The company is based at McLaren Technology Centre in England and is one of the most popular automotive manufacturers in the world.
Recently, due to the heavy impact of the COVID-19 pandemic, the entire automotive industry went for a toss. It has been two years since the pandemic first hit the world and since then, McLaren along with other automotive companies has been going into terrible losses. People have been stuck at home and the market is down, no one is buying cars, no one is going to watch live F1 races, there are hundred other factors that have impacted the company’s business.
In order to survive in the industry and recover from these pandemic-induced losses, McLaren has recently secured a whopping 760 million dollars from investors including Saudi Arabia’s sovereign wealth fund. It is a big deal for the company because the amount will fix most of the company’s financial problems.
This boost in finance from the Saudi Arabian wealth fund along with other investors will get the company back on its racing tracks, quite literally.
According to a report by Bloomberg, the funds invested by investors have been induced in the form of preference shares, equity warrants, and convertible preference shares. Its bifurcation allows the company to recover from the impact of the Coronavirus pandemic.
The funds managed by Saudi Arabia’s Public Investment Fund and Ares Management Corp. have confirmed to invest around USD 500 million or 400 million pounds in the form of equity warrants and preference shares. On the other hand, existing investors including National Bank of Bahrain BSC, Nidala Company and sovereign wealth fund Mumtalakat and a few other private investors have promised to infuse over 150 million pounds as convertible preference shares.
As mentioned in the report by Bloomberg, McLaren has even delayed the Formula 1 racing series this year because of the COVID-19 impact. The automotive company, controlled by Bahrain’s Mumtalakat, is also forced to halt its automotive production. Another reason for this halt could be the global chip shortages that have also caused other electric car manufacturers to stop their production.
Coming back to the motorsport company’s funding, according to confirmed reports, Goldman Sachs Group Inc. and HSBS Holdings Plc were advising McLaren on the transaction, as mentioned by Bloomberg.
The COVID-19 pandemic has hit everyone and especially the automotive industry. It is not just McLaren that is suffering from major losses, almost all car companies are going through the same effort to pull the plane back up.