McLaren Receives £550m (AUD $1 billion) Investment from Saudi Arabia
The new funding comes from Saudi Arabia’s Public Investment Fund [PIF]
Just recently, McLaren raised £550 million (approximately AUD 1 billion) as part of a new deal according to which, the Public Investment Fund of Saudi Arabia just became a minority shareholder of the racing group and supercar manufacturer.
McLaren adds Saudi Arabia as investor
The UK-based automotive company has raised quite a lot of money over the last two years for the research and development of hybrid/electric cars. Referred to as the Artura, the first hybrid entry-level supercar by McLaren will already hit the markets later this year.
Around £400m (AUD 745.1 million) within the latest investment came from Ares Management and PIF in Saudi Arabia. As a result of this, both have become minority shareholders. Other than Saudi Arabia, Bahrain’s Mumtalakat further added £150m (AUD 279.4 million).
Out of the raised money, McLaren will use some to pay back the loan that it took in 2020. Regarding the investment, the company was in talks since 2020. Regarding the investment by Saudi Arabia, the CFO of McLaren, Kate Ferry stated, “This is going to be long-term funding, and it gives us a really good capital structure for the next five years.”
McLaren is quite different as compared with other luxury carmakers, as it does not have a bigger automotive partnership. This means that the company must fund the technological advancements using its existing resources.
On the other hand, brands like Bentley and Lamborghini are owned by Volkswagen, whereas BMW owns Rolls-Royce.
The PIF in Saudi Arabia has also invested in Lucid, an electric car group that recently floated. McLaren is ready to work with different partners and suppliers for its next-gen electric cars, just the way it worked with BMW to produce cells for the upcoming hybrid car.
With that, the company just recently went through a complete re-organization. This meant that around 1/4th of the jobs got laid off. At the same time, McLaren also sold a stake in the world of racing. Ferry says that the latest investment by Saudi Arabia has reduced the need for further re-organising.
In other news, BMW’s design studio just came up with a new BMW gaming chair concept featuring advanced technology and features such as a built-in massage and temperature control system.
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