McLaren

Author
Discussion

RonaldMcDonaldAteMyCat

6,801 posts

50 months

Thursday 25th June
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It would be bad form if McLaren had a satisfactory offer of an unsecured loan on Friday and at the same time were arguing for an expedited trial.

Hugo Stiglitz

29,615 posts

166 months

Thursday 25th June
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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

TheDeuce

5,468 posts

21 months

Thursday 25th June
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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.

C Lee Farquar

3,075 posts

171 months

Thursday 25th June
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Hugo Stiglitz said:
It doesn't take a rocket scientist. McLaren assets are tied up in a debt promise.
What's a debt promise, it's not a term I've come across whilst launching rockets or otherwise?

Hugo Stiglitz

29,615 posts

166 months

Thursday 25th June
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A simple term. To describe a vow from one to another.

TheDeuce

5,468 posts

21 months

Thursday 25th June
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C Lee Farquar said:
Hugo Stiglitz said:
It doesn't take a rocket scientist. McLaren assets are tied up in a debt promise.
What's a debt promise, it's not a term I've come across whilst launching rockets or otherwise?
Oh c'mon. Who cares what term is used?? They have routinely been borrowing and managing a debt. They want to renew it again, but there is reason for the lenders to suspect that the assets they will have in security, are already used to secure another loan.

Fresh cash input requires: promise, bond, security, whatever other word .. the principle is pretty basic and I'm amazed how many are in some way finding this a hard concept to understand. They can have the money tomorrow... So long as they can prove their assets are not being leveraged across multiple lenders.

C Lee Farquar

3,075 posts

171 months

Thursday 25th June
quotequote all
TheDeuce said:
Oh c'mon. Who cares what term is used?? They have routinely been borrowing and managing a debt. They want to renew it again, but there is reason for the lenders to suspect that the assets they will have in security, are already used to secure another loan.

Fresh cash input requires: promise, bond, security, whatever other word .. the principle is pretty basic and I'm amazed how many are in some way finding this a hard concept to understand. They can have the money tomorrow... So long as they can prove their assets are not being leveraged across multiple lenders.
You've got that ass about face as far as the Court documents are concerned. But who cares.

Chrisgr31

11,609 posts

210 months

Thursday 25th June
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Isnt part of the issue that the amount of debt that is secured against the assets is significantly less than the value of those assets?

RonaldMcDonaldAteMyCat

6,801 posts

50 months

Friday 26th June
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TheDeuce said:
Oh c'mon. Who cares what term is used?? They have routinely been borrowing and managing a debt. They want to renew it again, but there is reason for the lenders to suspect that the assets they will have in security, are already used to secure another loan.

Fresh cash input requires: promise, bond, security, whatever other word .. the principle is pretty basic and I'm amazed how many are in some way finding this a hard concept to understand. They can have the money tomorrow... So long as they can prove their assets are not being leveraged across multiple lenders.
Not sure you've understood.

They're not renewing debt. They're maxed out and now looking to take on more debt.

The assets they want(ed) to sell are currently security for existing debt. They cannot sell them without permission from the trustee of the debt. They are asking the court to declare they can split out some of the assets under the current security to be used as security for new borrowing. The current debt holders are arguing those assets cannot be removed as their security and must not be sold.

In the intervening period it's been reported McLaren have been offered unsecured borrowing by a Bahraini bank associated with McLarens existing majority shareholder.

It's being reported McLaren are continuing to seek the declaration regards the security, presumably so they know if they burn through the new loan they understand whether they can split out and sell the assets as previously planned.

Exige77

5,172 posts

146 months

Friday 26th June
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I heard from a friend that McLaren have been talking to Mercedes for a while about road car engine supply. Not crate engines AMG / Aston style but their own bespoke engines that will be a development of the current units.

This would make sense as future engines will involve some electrification and will be costly to develop ?


Dermot O'Logical

932 posts

84 months

Friday 26th June
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Exige77 said:
I heard from a friend that McLaren have been talking to Mercedes for a while about road car engine supply. Not crate engines AMG / Aston style but their own bespoke engines that will be a development of the current units.

This would make sense as future engines will involve some electrification and will be costly to develop ?
They'll have to find a way of paying for them...

Exige77

5,172 posts

146 months

Friday 26th June
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Dermot O'Logical said:
Exige77 said:
I heard from a friend that McLaren have been talking to Mercedes for a while about road car engine supply. Not crate engines AMG / Aston style but their own bespoke engines that will be a development of the current units.

This would make sense as future engines will involve some electrification and will be costly to develop ?
They'll have to find a way of paying for them...
They’ll have to pay who ever they get the engines from.

skwdenyer

8,671 posts

195 months

Friday 26th June
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Exige77 said:
I heard from a friend that McLaren have been talking to Mercedes for a while about road car engine supply. Not crate engines AMG / Aston style but their own bespoke engines that will be a development of the current units.

This would make sense as future engines will involve some electrification and will be costly to develop ?
Oh the irony. If I understand the history correctly, it was the road car programme that precipitated the "great bust up" with Mercedes all those years ago?

Piginapoke

1,073 posts

140 months

Friday 26th June
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skwdenyer said:
Exige77 said:
I heard from a friend that McLaren have been talking to Mercedes for a while about road car engine supply. Not crate engines AMG / Aston style but their own bespoke engines that will be a development of the current units.

This would make sense as future engines will involve some electrification and will be costly to develop ?
Oh the irony. If I understand the history correctly, it was the road car programme that precipitated the "great bust up" with Mercedes all those years ago?
Ron's vision did that, wanted his own car company

Piginapoke

1,073 posts

140 months

2fast748 said:
If you call another £150m of debt secured to kick the can down the road for a bit more time, then yes

The Hypno-Toad

9,996 posts

160 months

2fast748 said:
That's good news. Hopefully they'll now be able to go a couple of weeks without announcing a special edition.

RonaldMcDonaldAteMyCat

6,801 posts

50 months

Piginapoke said:
If you call another £150m of debt secured to kick the can down the road for a bit more time, then yes
Not sure whether you mean it is secured borrowing or that McLaren have secured some borrowing. Considering the ongoing court case, suspect it's the latter. Wonder if there's a contractual route for it to turn into equity of they start to hit the buffers?

Dermot O'Logical

932 posts

84 months

From the Autosport article it seems that McLaren needed £280m, so this is a little over half of that.

The question remains- Can they manage on the £150m loan from the Bank of Bahrain (the majority owner of which is Mumtalakat) or do they still need to inject more capital to give them the liquidity to restore operations, and make the businesses viable?