British manufacturer of luxury cars and high technology, McLaren Group has reportedly secured an investment worth $745 Million (£550 million) in a deal that includes the Saudi Arabia Public Investment Fund (PIF) as one of its new minority shareholders.
Around £400 million of the new investment round can be accredited to Ares Management and the PIF, with the entities obtaining preference shares in exchange for funds. Meanwhile, the remaining £150 million hails from Bahrain's Mumtalakat, which is both a new as well as an existing private investor.
As per reports, a portion of funds will be used for repaying the National Bank of Bahrain for a loan taken out b last year during the outbreak, and this is far from a last-minute bailout. The management team of the British automaker says that the company has new initiatives in the pipeline.
According to Kate Ferry, McLaren Group’s Chief Financial Officer, this is a long-term investment, and it provides them with a sustainable capital structure for the next five years.
Paul Walsh, Executive Chair of McLaren Group, explained that McLaren has taken a few critical initiatives to place the firm on a solid basis for a long term, coupled with the close cooperation of its advisers and existing shareholders.
Following last year's strategic investment in racing, this successful equity raise is an essential part of McLaren Group's overall financial strategy to support the company's long-term growth objectives. There is currently speculation concerning McLaren's plans to carve out a niche for themselves in the electric vehicle market.
These speculations have been fueled since the company previously partnered with BMW on battery cells for hybrid vehicles, as well as the fact that the PIF just made another investment in Lucid, an electric car company.
Regardless of this, roping in some additional funds from the likes of Ares Management, the Saudi Arabia PIF, and Mumtalakat is expected to be a reassuring turning point for McLaren.