RE: McLaren seeks extra funding to mitigate losses

RE: McLaren seeks extra funding to mitigate losses

Tuesday 30th June

£150m loan secured by McLaren - update

National Bank of Bahrain confirms short-term financing arrangement



"McLaren Group confirms to the markets that final documentation has been signed and regulatory approvals have been granted for GBP 150 million of funding." That's all McLaren's investor press release says, blunt, direct and devoid of any further detail than the absolutely vital information: there's some money coming.

Vital money. As reported below, it was public knowledge that things were looking bleak for McLaren; times were tough enough not only for it to consider mortgaging the factory and heritage car collection, but actually go to court with a group of creditors when that attempt was resisted. That case was fast-tracked on the basis of an impending cash flow crisis.


Of course, blame has been placed at the door of the pandemic. "Interrupted our momentum" was the phrase used by CEO Mike Flewitt, which naturally downplayed the situation, but the reality was stark: supercars weren't being built, dealerships weren't open to sell any, and no Formula 1 events meant no revenue there, either. Both the Automotive and Racing divisions had no money coming in, and no clear sign of when any might be.

News of the loan is very much lifeline, then. According to a statement issued to its domestic stock market, The National Bank of Bahrain is the source of the loan. Interestingly Mumtalakat Holding Company, the McLaren Group's majority shareholder (its stake is currently 56%), also has a 44.06% share in the National Bank. The money is likely to be a stop-gap while McLaren explores its other refinancing options. Hopefully it will kickstart some more optimistic news for McLaren Group - especially with F1 restarting this weekend, too...



ORIGINAL STORY, AS REPORTED 15/05/2020:
Not so very long ago McLaren appeared to be on a roll. There was no shortage of product in the pipeline and even its struggling F1 team seemed to have turned a corner.Β The Group’s revenue reached Β£1.4 billion in 2019, 18 per cent better than the year before. In early March, it reported raising Β£300m of equity from its long-standing shareholders. Its problems with residual prices were well known, but otherwise everything appeared to be shipshape.Β 

Now, perhaps inevitably, it seems that the interruption caused by coronavirus has given the boat a proper rocking. The manufacturer has apparently had a request for a Β£150m government loan turned down. Sky News says that it is considering mortgaging its collection of historic racers - which includesΒ everything from Ayrton Senna’s MP4/4 to Mika Hakkinen’s MP4-13 - and even the factory in Woking to generate short-term funds.Β 


Were it a normal year, McLaren’s racing outfit would have received its share of F1’s income as well as its sponsorship revenues, the season now passed the date of its sixth round. There's no reason to think that the automotive division's healthy growth rate - up 7 per cent in 2019 - wouldn't have continued either. In a normal year.Β 

Sadly 2020 is an unprecedented year, and the knock-on effect is proving seismic. It's hard to believe that a company with McLaren's track record won't find the assistance it's looking for - theΒ official statement is that leaders are β€œexploring a variety of different funding options to help navigate these short-term business interruptions” - but not for the first time it goes to show just how fragile the cashflow of a modern carmaker can be.Β 


The McLaren Group is now chaired by former Diageo CEO, Paul Walsh. Speaking at his appointment earlier this year, Walsh said his responsibilities will revolve around β€œworking on the next phase of McLaren’s development” following his predecessor's (Shaikh Al Khalifa, now non-executive director) β€œvital reintegration of the Group”.

Elsewhere McLaren’s racing team received a boost with the signing of seven-time Grand Prix winner Daniel Ricciardo as a driver for 2021. The Aussie will join 20-year-old Brit, Lando Norris, at the squad. A team that many had down as one of 2020’s biggest improvers.


Author
Discussion

Stumason10

Original Poster:

30 posts

160 months

Friday 15th May
quotequote all
Honda Powered? Been Renualt power for 2 seasons, 3rd this year and next year Mercedes.

Sam Sheehan

59 posts

92 months

Friday 15th May
quotequote all
Stumason10 said:
Honda Powered? Been Renualt power for 2 seasons, 3rd this year and next year Mercedes.
Doh! Of course.

AmosMoses

3,765 posts

120 months

Friday 15th May
quotequote all
I dope they can weather this storm.

100

410 posts

31 months

Friday 15th May
quotequote all
Will this affect the price of P1s and F1s?

Tickle

3,808 posts

159 months

Friday 15th May
quotequote all
100 said:
Will this affect the price of P1s and F1s?
I'm hoping they drop sub £50k

flukey5

108 posts

15 months

Friday 15th May
quotequote all
Tickle said:
100 said:
Will this affect the price of P1s and F1s?
I'm hoping they drop sub £50k
Hahaha yes please, maybe I'll consider one when they do wink

BigChiefmuffinAgain

326 posts

53 months

Friday 15th May
quotequote all
You do wonder a bit about Mclaren in the current climate. Dealers were already stuffed full of stock before the problems, from what people were saying, and some of their limited editions had had a very luke warm response, residuals are already weak and going to get worse ( which is going to hurt the finance deals going forward ) and there doesn't even seem to be much in the way of NPD coming thru - suspect we'll just get more same engine, same tub, same interior etc etc.....

Going to be challenging times....

geo1905

46 posts

19 months

Friday 15th May
quotequote all
Come on everyone, enough with the daft comments ! This is a wonderful company, a major innovator, massive exporter, cutting edge technology etc. I'm sure they will survive and prosper, they deserve to and I sincerely hope so. And no, I have no connection with them !

thiscocks

2,244 posts

150 months

Friday 15th May
quotequote all
Does this mean there customer service will be even worse?

sisu

653 posts

128 months

Friday 15th May
quotequote all
McLaren isn't going to be around in 2 years.

Bro is best Bro is being asked for money, but they are being asked why they are sending money overseas.
They are pawning their family silver which they hope to buy back.

vikingaeroatwork

45 posts

4 months

Friday 15th May
quotequote all
thiscocks said:
Does this mean there customer service will be even worse?
Getting extra funding in doesn't change the rotten management culture - and that starts from the top.

650spider

1,018 posts

126 months

Friday 15th May
quotequote all
I expect this topic will turn into the usual McLaren thread ie; why i won't buy one, unreliable, same carbon tub, same engine, unreliable, rubbish engine noise, rubbish dealers blah blah blah and blah.

Some belters will even pitch up and state they are boring to drive.

Not sure what disappoints me the most about my McLaren; 0-60 in the 2s, 0-100 in the 5s, 0-124 in the 7s, fantastic service from McLaren Glasgow, or that it has never broken down or caused me any problems?

Maybe it is the pure theatre doors?

I cannot put my finger on it.

Hopefully some non owners can put me right.

ralphrj

2,982 posts

146 months

Friday 15th May
quotequote all
article said:
In early March, it reported raising £300m of equity from its long-standing shareholders. Its problems with residual prices were well known, but otherwise everything appeared to be shipshape.
The £300m of new equity was in the form of preference shares at 15% annual interest. Not what I would call "shipshape".

Leftfootwonder

283 posts

13 months

Friday 15th May
quotequote all
geo1905 said:
Come on everyone, enough with the daft comments ! This is a wonderful company, a major innovator, massive exporter, cutting edge technology etc. I'm sure they will survive and prosper, they deserve to and I sincerely hope so. And no, I have no connection with them !
Hear Hear!

British sports cars are among the best in the world, it's just a shame their management teams seem to be among the worst. frown

McLaren are a very special company doing some very special things, not to mention helping the fight with the ventilators etc. We need to get behind them, not slag them off.

Scootersp

1,403 posts

143 months

Friday 15th May
quotequote all
650spider said:
I expect this topic will turn into the usual McLaren thread ie; why i won't buy one, unreliable, same carbon tub, same engine, unreliable, rubbish engine noise, rubbish dealers blah blah blah and blah.

Some belters will even pitch up and state they are boring to drive.

Not sure what disappoints me the most about my McLaren; 0-60 in the 2s, 0-100 in the 5s, 0-124 in the 7s, fantastic service from McLaren Glasgow, or that it has never broken down or caused me any problems?

Maybe it is the pure theatre doors?

I cannot put my finger on it.

Hopefully some non owners can put me right.
I work in Woking near their original offices, the cars always impress despite seeing them most days, seen many a nearly complete Senna amongst all the others which ashamedly I don't always know the different models but they are seriously out of my league.

If forced to make a criticism if would be some can sound 'farty' at idle/low revs when they move them around but no doubt this is the regulations. Despite always seeing them around Woking, never seen one 'on it' so to speak. I did follow a original F1, coming back from Goodwood once that was nice to see and gave the odd stab.

Matty3

650 posts

39 months

Friday 15th May
quotequote all
650spider said:
I expect this topic will turn into the usual McLaren thread ie; why i won't buy one, unreliable, same carbon tub, same engine, unreliable, rubbish engine noise, rubbish dealers blah blah blah and blah.

Some belters will even pitch up and state they are boring to drive.

Not sure what disappoints me the most about my McLaren; 0-60 in the 2s, 0-100 in the 5s, 0-124 in the 7s, fantastic service from McLaren Glasgow, or that it has never broken down or caused me any problems?

Maybe it is the pure theatre doors?

I cannot put my finger on it.

Hopefully some non owners can put me right.
Had mine a year now, sadly wink it has been absolutely perfect in every respect.

I am sure McL will be fine but challenging times ahead for all car manufacturers in the coming months.


Edited by Matty3 on Friday 15th May 14:00

davidc1

880 posts

117 months

Friday 15th May
quotequote all
They build too many cars . I do like them . Lovely size on the road.
Hope it works out for them.

Whatsmyname

399 posts

32 months

Friday 15th May
quotequote all
Tickle said:
100 said:
Will this affect the price of P1s and F1s?
I'm hoping they drop sub £50k
For an interim service?

robsco

6,782 posts

131 months

Friday 15th May
quotequote all
I have a new found interest in the brand since I discovered you can pick up an MP4-12C for less than 70k. It seems like a proper English brand to me. Great cars, questionable quality, bad management.

Glenn63

879 posts

39 months

Friday 15th May
quotequote all
650spider said:
I expect this topic will turn into the usual McLaren thread ie; why i won't buy one, unreliable, same carbon tub, same engine, unreliable, rubbish engine noise, rubbish dealers blah blah blah and blah.

Some belters will even pitch up and state they are boring to drive.

Not sure what disappoints me the most about my McLaren; 0-60 in the 2s, 0-100 in the 5s, 0-124 in the 7s, fantastic service from McLaren Glasgow, or that it has never broken down or caused me any problems?

Maybe it is the pure theatre doors?

I cannot put my finger on it.

Hopefully some non owners can put me right.
Maybe that’s it, just stats on paper, no character or soul.