Saudi wealth fund PIF joins McLaren’s $757 mn funding round

 Saudi wealth fund PIF joins McLaren’s $757 mn funding round

McLaren cars at the French GP in June 2021. Photo credit: Mark Sutton / Sutton Images.

Saudi Arabian sovereign wealth fund Public Investment Fund (PIF) has co-led a $757 million (£550 million) investment into the UK-based McLaren Group, which includes the supercar maker and McLaren Racing.

McLaren is majority owned by Bahrain’s sovereign wealth fund Mumtalakat, with a 62.55% stake. Mumtalakat is also raising its stake in the group by pitching in with a little over a fourth of the equity infusion.

Global alternative investment firm Ares Management Corp has also backed the British group, which owns the US-based IndyCar and is slated to enter the Extreme E-offroad electric series in 2022.

PIF and Ares are ploughing £400 million of the £550 million as preference shares and equity warrants. Both entities will become minority shareholders in the British carmaker.

The remaining £150 million will be raised from Mumtalakat and some new private investors that McLaren didn’t identify. This will come in as convertible preference shares. The money will be used to repay a loan received in June 2020 from the National Bank of Bahrain.

In March 2020, McLaren received a £300 million equity infusion from its shareholders. The following month, in April, it sold its headquarters at Woking, in the UK, in a £170 million sale and leaseback deal.

In December last year, US-based MSP Sports Capital acquired a minority stake in McLaren for £185 million.

This is at least the second major investment by PIF in a global carmaker. In 2018, it had invested more than $1 billion in US-based electric vehicle startup Lucid Motors Inc. In February this year, Lucid announced it was going public via a blank cheque company.

The company had said it would merge with Churchill Capital Corp IV, a special purpose acquisition company (SPAC), at a transaction equity value of $11.75 billion and list on the New York Stock Exchange.

In June last year, media reports said that the Saudi wealth fund owned more than half of Lucid Motors. At present, PIF controls 85% of the company and will continue to be a majority owner with a 62% stake even after the listing.

Aman Malik

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