Cash-strapped McLaren has been forced to ask its Bahraini owner for an additional £80m in funding
Facing significant financial challenges, McLaren, the renowned luxury carmaker, has found itself compelled to urgently seek an additional £80 million in funding from its shareholders, navigating a critical cash crisis that threatens its stability.
The company issued a stark warning last month, signaling the imperative need for more funds from its Bahrain owners as losses at the business more than doubled in the previous year. These losses, attributed to delivery delays and surging costs, have prompted McLaren to take decisive action to secure its financial future.
Investors had previously injected £370 million into the company between March and September, reflecting their commitment to McLaren's longevity. However, the financial landscape remains challenging, with losses for 2021 soaring from £135 million to a staggering £349 million.
Bahrain’s Mumtalakat Holding Company, the sovereign wealth fund holding a substantial two-thirds stake in McLaren, stands as the company's largest shareholder. The urgency of the funding appeal is underscored by the precarious financial position flagged by auditors in September of the previous year, citing the global semiconductor shortage that wreaked havoc on the entire automotive industry during the pandemic.
In addition to semiconductor-related challenges, McLaren is grappling with significant delivery delays, particularly affecting its highly anticipated next-generation Artura supercar. The production in Woking has been marred by quality control issues, adding to the company's woes. Recent accounts underscore the severity of the situation, revealing that losses incurred in 2021 translated to an alarming deficit of almost £140,000 per car produced.
To alleviate financial strains, McLaren made a strategic move in 2021, selling its iconic Woking headquarters to investment firm GNL in a £170 million deal. Despite this sale, the company negotiated a tenant agreement, allowing it to continue operating from the premises for the next two decades.
A spokesperson for McLaren emphasized the critical nature of the funding appeal, describing it as an integral part of an ongoing recapitalization process involving existing shareholders. The commitment of Bahrain’s Mumtalakat Holding Company, as a key stakeholder, underscores their dedication to McLaren's sustained success in navigating the challenging financial terrain.
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