Discussion
I think that is a pretty good summary.
The only small change I would make is that my understanding is that the debt-holders are threatening the trustees with legal action if they allow the assets to be sold rather than legal action against McLaren.
The trustees are the defendant in the upcoming court case but in reality are just piggy in the middle.
The only small change I would make is that my understanding is that the debt-holders are threatening the trustees with legal action if they allow the assets to be sold rather than legal action against McLaren.
The trustees are the defendant in the upcoming court case but in reality are just piggy in the middle.
ralphrj said:
The only small change I would make is that my understanding is that the debt-holders are threatening the trustees with legal action if they allow the assets to be sold rather than legal action against McLaren.
I've only read it once, however I think the bond holders also threatened to sue the McLaren directors for breach of fiduciary duties if they went ahead with the sale. I imagine they could also apply for an injunction against McLaren if they thought there was a legal reason the sale could not proceed. RonaldMcDonaldAteMyCat said:
ralphrj said:
The only small change I would make is that my understanding is that the debt-holders are threatening the trustees with legal action if they allow the assets to be sold rather than legal action against McLaren.
I've only read it once, however I think the bond holders also threatened to sue the McLaren directors for breach of fiduciary duties if they went ahead with the sale. I imagine they could also apply for an injunction against McLaren if they thought there was a legal reason the sale could not proceed. The challenge they also have is that McLaren haven't been paying Suppliers on time or at all in a long time (years) creating lots of bad blood in the supply chain.
To the point where the carbon Tub Manufacturer (name escapes me) has successfully taken charges out against the tub tooling and several XP cars.
Additionally they have apparently been shipping cars to dealers that they do not ask for, so that they can invoice and get the cash in, I imagine the dealers have no ability to pay for them however so no actual cash is present.
Its sad really as an ex employee present for the launch of the car business as we know it, to see them be completely destroyed by their own sales ambition, it all comes back to the cost of developing a car from scratch was vastly under estimated creating a need to constantly modify without ever being able to update the underlying architecture (tub/engine) meaning the products are becoming increasingly compromised in the way of design and performance.
The money required to spend their way out of the trap they find themselves is north of a billion, which no one is going to lend them and they would with the current strategy never repay.
I think it has gone to far now and It is at the point where the group need to cut free the road car business before it takes everything down with it. They really are delaying the inevitable.
To the point where the carbon Tub Manufacturer (name escapes me) has successfully taken charges out against the tub tooling and several XP cars.
Additionally they have apparently been shipping cars to dealers that they do not ask for, so that they can invoice and get the cash in, I imagine the dealers have no ability to pay for them however so no actual cash is present.
Its sad really as an ex employee present for the launch of the car business as we know it, to see them be completely destroyed by their own sales ambition, it all comes back to the cost of developing a car from scratch was vastly under estimated creating a need to constantly modify without ever being able to update the underlying architecture (tub/engine) meaning the products are becoming increasingly compromised in the way of design and performance.
The money required to spend their way out of the trap they find themselves is north of a billion, which no one is going to lend them and they would with the current strategy never repay.
I think it has gone to far now and It is at the point where the group need to cut free the road car business before it takes everything down with it. They really are delaying the inevitable.
Bertrum said:
Additionally they have apparently been shipping cars to dealers that they do not ask for, so that they can invoice and get the cash in, I imagine the dealers have no ability to pay for them however so no actual cash is present.
They've been pulling that trick since day one pretty much, it's how they hit their numbers for first couple of years, and as a result the cars were being sold at discount by dealers to pay for them, and so you end up with their depreciation being so catastrophic. This article https://www.racefans.net/2020/06/24/why-mclaren-an... suggests the Bahrainis have already agreed to stump up the cash but the case is going ahead anyway
Chrisgr31 said:
This article https://www.racefans.net/2020/06/24/why-mclaren-an... suggests the Bahrainis have already agreed to stump up the cash but the case is going ahead anyway
The quote attributable to the "McLaren insider" has that whiff of bulls
t about it. You don't tend to go to High Court and argue very hard for one of the most expedited trials known in English courts for a matter of this complexity, unless you really have to.There's no doubt they have willing buyers for the assets, thats not the issue. The issue is whether they're allowed to sell them at all. If the buyers of the assets are existing shareholders of McLaren, that adds a layer of complexity as you're redistributing the group's value to people who stand to lose if the company folds. It wouldn't be right for debtors to lose out and shareholders maintain assets at what might be favourable terms in the event the group were to fold.
Chrisgr31 said:
This article https://www.racefans.net/2020/06/24/why-mclaren-an... suggests the Bahrainis have already agreed to stump up the cash but the case is going ahead anyway
Is it possible the Bahrainis are the ones buying the property and cars, rather than putting more equity in?Pitpass attempts to clarify the somewhat muddy waters:
https://www.pitpass.com/67108/McLaren-turns-to-Bah...
https://www.pitpass.com/67108/McLaren-turns-to-Bah...
RonaldMcDonaldAteMyCat said:
If the Bahrainis are willing to chuck money at McLaren without any security, does this mean they're going to be pushing to turn it into equity in case of default?
It means they'll just buy more of the group. Plan a= borrow to shore up liquidity. If the securities issues to be heard in court make that impossible, plan b= sell equity to get the money. There isn't really a third option... Borrow or sell. Or I suppose give up but that seems unlikely.Tbh the Bahrainis could conceivably own it lock stock (or near enough) after this, and long term if they get the car making side profitable, it could one day be seen as a steal. It's a hell of a brand - there is potential for success, it's just that making only sports cars these days is a very tricky business for anyone.
Dermot O'Logical said:
Pitpass attempts to clarify the somewhat muddy waters:
https://www.pitpass.com/67108/McLaren-turns-to-Bah...
That’s basically the Racefans article from yesterday rewritten is t it?https://www.pitpass.com/67108/McLaren-turns-to-Bah...
Chrisgr31 said:
That’s basically the Racefans article from yesterday rewritten is t it?
Yes. And the racefans article didn't add anything to what was already known anyway.The court case isn't even a main event in all this, it's just a result of what is happening and public... The big news should actually be what McLaren will do to turn around the business under such difficult circumstances. Regardless of the courts case or the results, the business will still need sorting out asap or it will fail.
Chrisgr31 said:
Dermot O'Logical said:
Pitpass attempts to clarify the somewhat muddy waters:
https://www.pitpass.com/67108/McLaren-turns-to-Bah...
That’s basically the Racefans article from yesterday rewritten is t it?https://www.pitpass.com/67108/McLaren-turns-to-Bah...
thegreenhell said:
All of these sites just copy off each other, or make up their own stories for the other sites to copy. You won't find any real news on any of them.
Indeed. All there is factually is the outline of McLarens court claim. In the end, anyone who wants to know more and what it means beyond a good or bad day in court needs to use their nouse.Whatever the result there will be another slew of articles which will just rehash what is already a matter of public record. Meanwhile behind closed doors McLaren will be working on the best next steps.
It's what they do next that matters. And there won't be any articles about that until they've done it.
Hugo Stiglitz said:
It doesn't take a rocket scientist. McLaren assets are tied up in a debt promise.
Which means what's left if it goes down hill
That's literally it. People are reacting as if this hearing is a final yes or no for McLaren being able to continue... It isn't. It's just a final decision on them being able to raise funds their preferred way. Sounds like they probably can't, I'm sure they're planning for that eventuality.Which means what's left if it goes down hill
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