McLaren is expected to be fully acquired by the Gulf state’s sovereign wealth fund, Mumtalakat.
Sky News understands that Mamtarakat has a deal in place with McLaren’s remaining minority shareholders to convert their shares into warrant-like products.
The new contract will have economic rights to benefit from future “liquidity events” such as McLaren’s initial public offering, but will not be classified as equity.
Officials believe an agreement between the two parties could be reached as early as later this week. The deal will see 20 per cent of McLaren’s shares converted into a new deal, leaving the state of Bahrain as the sole shareholder of the F1 team’s ownership group.
Confident in further stability
During the pandemic, McLaren had its own external shareholders to raise capital during tough times. The deal, which is expected to be confirmed this week, demonstrates Mumtalakat’s confidence and leadership in guiding the rebuilding of the Woking team.
The British brand’s complex capital structure has served as a holder of the ability to form long-term partnerships with the company in recent years.
Earlier this year, Mamtarakat acquired McLaren’s stake in Saudi Arabia’s sovereign wealth fund and Ares Management, a major US-based financial investor.
More recently, the Bahrain-based fund is thought to have invested a further £80m in the company, which makes the Artura supercar.
During the Covid-19 pandemic, the company was forced to undergo extensive restructuring. This resulted in the loss of hundreds of jobs, and the company raised significant amounts of equity and debt to repair its balance sheet.
McLaren has also undertaken a series of corporate deals since the start of the pandemic and sought government loans, a request that was rejected by ministers.
Mr Walsh has overseen the sale of a stake in McLaren Racing to another group of investors, as well as the £170m sale and leaseback of the company’s spectacular Surrey headquarters. In 2021, it also sold McLaren Applied Technologies, which generates revenue from sales to corporate customers.
The company’s separate divisions were reunited following the departure in 2017 of veteran McLaren manager Ron Dennis, who led the F1 team through the most successful period in McLaren’s history. Mr Dennis sold his shares in a £275m deal after a bitter dispute with other shareholders.
McLaren on the rise
McLaren’s form improved significantly during the 2023 season. The team is led by his CEO, Zach Brown, who also leads the division.
The Woking team had a disastrous start to the season, finishing bottom of mid-table. However, after the Austrian Grand Prix, the team became regulars on the podium.
The British team’s aim is to challenge Red Bull in the 2024 season. The Austrian team has been dominant over the past two years since the introduction of ground effect regulations.
The team has introduced a number of new people within the team. The new personnel brought in by Zac Brown greatly improved the team’s performance.
One issue the team is aware of is the wind tunnel. Teams such as Red Bull, Mercedes and Ferrari are far better equipped than Woking at the moment.
However, McLaren’s new wind tunnel is expected to be completed in 2024 and first used in the 2025 season.
Feature image credit: Jakub Porzycki/NurPhoto, Getty Images