Is McLaren about to file for insolvency???

Is McLaren about to file for insolvency???

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Discussion

Cheib

20,433 posts

141 months

Monday 29th June 2020
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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.

LordOfTheManor

1,057 posts

77 months

Monday 29th June 2020
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I'm really pleased they are missing good old Ron - They should ask him back

Taffy66

4,573 posts

68 months

Monday 29th June 2020
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LordOfTheManor said:
I'm really pleased they are missing good old Ron - They should ask him back
Have you taken delivery of your stunning 675LT Spyder yet..If so how are you finding it.?

Ferruccio

1,541 posts

85 months

Monday 29th June 2020
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LordOfTheManor said:
I'm really pleased they are missing good old Ron - They should ask him back
Good old Ron, who admitted cheating and was fined $100m.

Edited by Ferruccio on Monday 29th June 22:09

RunEveryInchOfTheWorld

1,946 posts

15 months

Monday 29th June 2020
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Ferruccio said:
LordOfTheManor said:
I'm really pleased they are missing good old Ron - They should ask him back
Good old Ron, who admitted cheating and was fined $100m.

Edited by Ferruccio on Monday 29th June 22:09
Love him or loathe him, he was good at winning championships and building a brand/company. Clearly he was doing something right, considering they have never won a championship again and are now facing financial disaster.

I personally have always thought of him as a shrewd businessman. And someone I admire.

jtremlett

1,029 posts

188 months

Tuesday 30th June 2020
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RunEveryInchOfTheWorld said:
Clearly he was doing something right, considering they have never won a championship again and are now facing financial disaster...
I think you forget that he was in charge for much of the time since their last championship win. He was also in charge when they started road car production (12C onwards). In any case, whilst they clearly had financial issues pre-Covid and massively exacerbated by Covid, disaster is too strong a word. They are not going to go bust. One way or another there are enough investors around who will bet on them long term and will cover them short term.

Ferruccio

1,541 posts

85 months

Tuesday 30th June 2020
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[quote=jtremlett They are not going to go bust. One way or another there are enough investors around who will bet on them long term and will cover them short term.

[/quote]

Investors in any business need a credible business case that shows a decent IRR.

SydneyBridge

5,831 posts

124 months

Tuesday 30th June 2020
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I still wonderi f they will get to a point where they will have too much debt to survive. However many cars they sell, they are in trouble jf all profit goes on paying debt

RunEveryInchOfTheWorld

1,946 posts

15 months

Tuesday 30th June 2020
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jtremlett said:
RunEveryInchOfTheWorld said:
Clearly he was doing something right, considering they have never won a championship again and are now facing financial disaster...
I think you forget that he was in charge for much of the time since their last championship win. He was also in charge when they started road car production (12C onwards). In any case, whilst they clearly had financial issues pre-Covid and massively exacerbated by Covid, disaster is too strong a word. They are not going to go bust. One way or another there are enough investors around who will bet on them long term and will cover them short term.
He put Whitmash in charge and worked on road cars. Whitmash wanted to reduce Hamiltons salary from £20m to £10m to match Buttons. As they had both won 3 races each the season before and wanted driver parity. Mercedes offered Hamilton £20m and he went. Whitmashes quotes afterwards were absurd, such as "Hamilton does not want to win anymore races" IIRC.

Mercedes then reduced their stake in Mcl and went from priority partners to customers, which was when Honda were came in. Ron forced them in a year too early in order to try and build something for the future. But that and Alonso's return into a well established hybrid era were little efforts against a changing wind.

Which brings us to now. The F1 team is now a mid, lower bottom-end team. Customer engines and paid drivers, does this sound familiar? Mortgage against the assets and loans. Considering Mcl own their HQ and are now selling the building to rent it back, shows a lack of long term vision and short term props. I can imagine this being a downward spiral.

Just to clarify, i really have enjoyed watching Mcl growing. It was Ron's vision and he really did build something brilliant. And I hate seeing the decline. However the management are poor and the ethos even worse. i.e. We are Mclaren, i.e We are Williams. This arrogance will be the ultimate dismiss.








cypriot

424 posts

65 months

Tuesday 30th June 2020
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footsoldier said:
good lord this is a sh*t show! if this is honestly real, Mclaren won't be able to raise money in time. And the funny thing is that I totally agree with the group blocking the new financing. At the end of the day, they lent money to Mclaren, Mclaren have st the bed financially for many reasons non covid related, and now they are facing the music. the existing Creditors can do what they like in my opinion. it's business, and Mclaren are ignoring their existing contracts. go bust and start again! this is basically the foundation of British automotive manufacturing!

ralphrj

3,117 posts

157 months

Tuesday 30th June 2020
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SydneyBridge said:
I still wonderi f they will get to a point where they will have too much debt to survive. However many cars they sell, they are in trouble jf all profit goes on paying debt
We can tell a little from publicly available information. Off the top of my head, they have £570m owed on bonds at 5.75% and £290 million of preference shares at 15% interest. Those would add up to £76m of interest ever year. The new loan will be on top of that.

PM3

146 posts

26 months

Tuesday 30th June 2020
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SydneyBridge said:
I still wonder f they will get to a point where they will have too much debt to survive. However many cars they sell, they are in trouble jf all profit goes on paying debt
Perhaps a microcosm of the macrocosm of the whole UK debt situation ... current/post Covid-xx

RunEveryInchOfTheWorld

1,946 posts

15 months

Tuesday 30th June 2020
quotequote all
cypriot said:
footsoldier said:
good lord this is a sh*t show! if this is honestly real, Mclaren won't be able to raise money in time. And the funny thing is that I totally agree with the group blocking the new financing. At the end of the day, they lent money to Mclaren, Mclaren have st the bed financially for many reasons non covid related, and now they are facing the music. the existing Creditors can do what they like in my opinion. it's business, and Mclaren are ignoring their existing contracts. go bust and start again! this is basically the foundation of British automotive manufacturing!
How did they spend so much money so quickly!


Porsche guy

3,120 posts

193 months

Tuesday 30th June 2020
quotequote all
cypriot said:
good lord this is a sh*t show!
After reading all 32 pages it sure is!

Cheib

20,433 posts

141 months

Tuesday 30th June 2020
quotequote all
RunEveryInchOfTheWorld said:
cypriot said:
footsoldier said:
good lord this is a sh*t show! if this is honestly real, Mclaren won't be able to raise money in time. And the funny thing is that I totally agree with the group blocking the new financing. At the end of the day, they lent money to Mclaren, Mclaren have st the bed financially for many reasons non covid related, and now they are facing the music. the existing Creditors can do what they like in my opinion. it's business, and Mclaren are ignoring their existing contracts. go bust and start again! this is basically the foundation of British automotive manufacturing!
How did they spend so much money so quickly!
R&D, Capex, OPEX and not making money would be my guess ! Probably borrowed money to invest in the business but have chased volume to get profitable but built too many cars and destroyed margins.

RunEveryInchOfTheWorld

1,946 posts

15 months

Tuesday 30th June 2020
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They should go bankrupt. Perhaps after the debt has been cleared it could return to profitability. However i can imagine being in the same boat as TVR/Lotus/Williams.

They took on Ferrari and failed, shows you how good the red cars are.


anonymous-user

20 months

Tuesday 30th June 2020
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RunEveryInchOfTheWorld said:
They should go bankrupt. Perhaps after the debt has been cleared it could return to profitability. However i can imagine being in the same boat as TVR/Lotus/Williams.

They took on Ferrari and failed, shows you how good the red cars are.
I think taking on Porsche with the Sports Series was the issue. Too much, too soon. They’ve been quite good at taking on Ferrari. Lots of ex-fez owners now own Mac’s.

TB993tt

1,895 posts

207 months

Tuesday 30th June 2020
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RunEveryInchOfTheWorld said:
They should go bankrupt. Perhaps after the debt has been cleared it could return to profitability. However i can imagine being in the same boat as TVR/Lotus/Williams.
They would somehow have to appease who I would imagine will be major creditors Ricardo and Granzio or there will be no phoenixing for them.

IMI A

8,541 posts

167 months

Tuesday 30th June 2020
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RunEveryInchOfTheWorld said:


They took on Ferrari and failed, shows you how good the red cars are.
Its not over till the fat lady sings wink

IMI A

8,541 posts

167 months

Tuesday 30th June 2020
quotequote all
TB993tt said:
RunEveryInchOfTheWorld said:
They should go bankrupt. Perhaps after the debt has been cleared it could return to profitability. However i can imagine being in the same boat as TVR/Lotus/Williams.
They would somehow have to appease who I would imagine will be major creditors Ricardo and Granzio or there will be no phoenixing for them.
CVA smile