Is McLaren about to file for insolvency???
Discussion
I have been undertaking some research on the 570S and I stumbled across some rather disturbing financials on McLaren. It would appear that by the 17th July they need to raise 275 million to avoid insolvency. They have been granted fast track court proceedings to try and release security on assets previously granted on earlier loans. It would appear that they wish to sell their premises and lease them back from the purchaser, and mortgage their heritage cars, aside of other fund raising ventures.
Their Q1 sales seem to have collapsed even before the lockdown, selling circa 300 units as opposed to circa 1,000 units in Q1 of 2019. They appear to have had a 300 million bailout in March from investors which has already been spent. I imagine that insolvency would have a dramatic effect on the desirability and the values of McLaren’s, if only for the concerns as to the supply of dedicated spare parts in the future.
Their Q1 sales seem to have collapsed even before the lockdown, selling circa 300 units as opposed to circa 1,000 units in Q1 of 2019. They appear to have had a 300 million bailout in March from investors which has already been spent. I imagine that insolvency would have a dramatic effect on the desirability and the values of McLaren’s, if only for the concerns as to the supply of dedicated spare parts in the future.
650spider said:
Has production stopped on 5 series and 7 series models ( excluding the 765 ) ?
Yes production has stopped all together on sports series. 720s will be manufactured until late 2022, early 2023. Only customer ordered 720S will be built this year, to give dealers the chance to clear current stock. A wise move in my opinion. I believe there is a new Sport Series about to be launched which is moving to a hybrid power unit, so that's why they aren't building any more of the 540/570's.
https://www.evo.co.uk/202198/next-generation-mclar...
https://www.evo.co.uk/202198/next-generation-mclar...
Lots of businesses have refinanced recently and to give four different versions of the same story does not necessarily paint a full picture
At the end of the day if you're uncomfortable do not buy but remember all the manufacturers whose cars are still maintained whether or not the manufacturer still exist
At the end of the day if you're uncomfortable do not buy but remember all the manufacturers whose cars are still maintained whether or not the manufacturer still exist
Maintaining cars without access to parts such as an ECU and or anything completely proprietary, (which I understand is virtually everything) is not going to be easy. Aside of that lets hope the name of McLaren, its cars, and racing heritage can survive. I will sit on the fence and see what happens over the next couple of weeks.
Interestingly bonds have come up from lows but still yielding 42% to maturity.
https://markets.businessinsider.com/bonds/mclaren_...
https://markets.businessinsider.com/bonds/mclaren_...
Spare parts are usually made by the same suppliers who sell it to McLaren into the new car (McLaren is only assembling those parts not making themselves) like ZF, Bosch, Valeo, Brembo etc. - even if McLaren would go file for insolvency and then not find a new investor after bancrupcy, those companies could still continue selling those spare parts, as they already have the tooling for that in their own plants - and given how high they are priced by McL they would make nice money on it...
I agree with all that you say, brakes, gearboxes steering components etc. will not be likley problems, but I am talking about things like the CPU, and electronics and other items which are undoubtedly totally proprietary.
Anyway if they are going down the road supported by their Arab owners hopefully none of this will be relevant.
Anyway if they are going down the road supported by their Arab owners hopefully none of this will be relevant.
McLarenGuru said:
The factory is still building Speedtail/765LT/Elva, i'm sure they would not be taking spec's of 765LT if they didn't have a plan to move forward. Fingers crossed.
What would you expect them to do,tell those customers that they are going under so don't bother with your order,airlines are the same you only know when you go to get on the plane and you can't that the receivers have been called!Difficult times but even more worryingly if they did raise 250 million how long do you think it would last?,
Looks like they are are having to sell their sole to another country to survive, sad times for British car manufacturing.
But on the positive side it’s great news someone has stepped in to save the company after uk government turned them down.
Let’s hope we get to see more of there excellent cars in the future.
But on the positive side it’s great news someone has stepped in to save the company after uk government turned them down.
Let’s hope we get to see more of there excellent cars in the future.
Ferruccio said:
Interestingly bonds have come up from lows but still yielding 42% to maturity.
https://markets.businessinsider.com/bonds/mclaren_...
Bonds in a situation like this trade on recovery value in default not yield.....so at a price of 70 given the security the bonds hold they are pricing in a decent chance of default. Traditionally in a bankruptcy you’d expect to recover about 40% of the outstanding amount. https://markets.businessinsider.com/bonds/mclaren_...
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