Supercar maker McLaren seeks $374 million in new funding2 min read . Updated: 06 May 2020, 02:44 PM IST
McLaren is working with an adviser as it examines ways to strengthen its finances amid coronavirus crisis.
McLaren Group Ltd., the supercar maker and racing team owner, is seeking about 300 million pounds ($374 million) in fresh funding just months after completing a similarly-sized capital raise, people familiar with the matter said.
The British company is working with an adviser as it examines ways to strengthen its finances, according to the people, who asked not to be identified because the information is private.
McLaren said in March that its existing shareholders had put in 300 million pounds of new equity. It also announced it had appointed Paul Walsh, the former chief executive officer of liquor giant Diageo Plc, as its executive chairman.
The company, controlled by sovereign wealth fund Bahrain Mumtalakat Holding Co., has been hit by the coronavirus pandemic which has delayed the Formula 1 racing series and forced it to halt automotive production. Automakers from Daimler AG to Renault SA have cut or scrapped guidance in recent weeks because of lockdowns tied to Covid-19.
Ferrari NV also lowered its earnings guidance for 2020 this week, saying it has seen several order cancellations and expected the reduced number of Formula 1 races to cut into its sponsorship income. U.K. luxury carmaker Aston Martin Lagonda Global Holdings Plc, which has struggled with cash flow, earlier this year raised 536 million pounds from a group led by billionaire Lawrence Stroll. Even after bringing in new investors, the coronavirus crisis has added a level of difficulty to the turnaround put in place with Stroll’s arrival.
McLaren’s deliberations are at an early stage, and the exact structure of the potential fundraising hasn’t been finalized, the people said.
“Like other businesses we have been severely affected by the current pandemic," a representative for McLaren said. “We are in continued dialogue with our banks and investors to help navigate these short-term business interruptions."
McLaren is “looking at a severe liquidity crunch" which will be most acute in the middle of the year, chief financial officer Paul Buddin said on a conference call last month. It is working with its shareholders, relationship banks and advisers to pursue “a number of credible options" for funding, he said.
The company’s ability to sell cars during the second quarter has been severely impacted by the coronavirus outbreak, according to Buddin. While McLaren said that business forecasts are changing daily due to the uncertainty, it’s cutting investments and delaying the introduction of a vehicle based on its new platform to preserve cash.
This story has been published from a wire agency feed without modifications to the text.