Bahrain’s sovereign wealth fund is taking full ownership of the McLaren Group, one of the most revered names in British premium manufacturing, as part of long-term plans to secure a partnership with a global industrial giant.
Sky News has learned that Mumtalakat, the Gulf state’s investment fund, is on the verge of a deal with McLaren’s remaining minority shareholders to convert their equity into warrant-like instruments.
The new contracts will have the financial rights to benefit from a future “liquidity event” such as an initial public offering of McLaren, but will not be classified as shares.
A banking source said they expected the deal to be announced later this week.
That would see around 20% of the equity in McLaren converted to the new contracts, leaving the state of Bahrain as the Formula 1 team ownership group’s sole shareholder.
McLaren Racing, the division that directly houses F1 and other racing activities, has its own external shareholders following a deal struck during the pandemic to raise capital.
The deal, due to be signed this week, underlines Mumtalakat’s continued confidence and leadership in driving McLaren’s turnaround, according to an insider.
The Woking-based company’s convoluted capital structure has acted as a deterrent to the ability of global car groups to structure a long-term partnership with it in recent years.
Simplifying this structure is likely to pave the way for a technology partnership with an original equipment manufacturer (OEM) in the coming years as McLaren transitions to become a hybrid and electric car company.
Bankers have talked up the prospect of a public listing of McLaren for years, but its repeated need to tap its private shareholders for financing and supply chain challenges that have hampered its recovery mean an IPO is still likely years away.
Earlier this year, Mumtalakat bought the McLaren shares in Saudi Arabia’s sovereign wealth fund and Ares Management, a major US-based financial investor.
Recently, the Bahrain-based fund was reported to have injected a further £80m into the company, which makes the Artura supercar.
McLaren was hit by delays in the delivery of the Artura, which – while garnering positive reviews – has required a number of technical upgrades.
Last year, McLaren appointed ex-Ferrari executive Michael Leiters as head of its road car division.
During the COVID-19 pandemic, the company was forced into a far-reaching restructuring that saw hundreds of jobs cut and significant amounts raised in equity and debt to repair its balance sheet.
In its racing division, which includes the Formula One cars driven this year by Lando Norris and Oscar Piastri, McLaren has also seen a turnaround under Zak Brown, who heads that part of the company.
McLaren has also made a number of corporate transactions since the start of the pandemic when it sought a government loan – a request which was rejected by ministers.
Sir. Walsh has overseen the sale of a stake in McLaren Racing to a separate group of investors, as well as a £170m sale-and-leaseback. of its spectacular Surrey headquarters.
In 2021, it also sold McLaren Applied Technologies, which generates revenue from sales to business customers.
Founded in 1963 by Bruce McLaren, the group’s name is among the most famous in British motorsport.
During half a century of competition in F1, it has won the constructors’ championship eight times, while its drivers have included the likes of Mika Hakkinen, Lewis Hamilton, Alain Prost and Ayrton Senna.
In total, the team has won 180 Grand Prix, three Indianapolis 500s and the Le Mans 24 Hours on its debut.
The company saw its separate divisions reunited after the departure in 2017 of Ron Dennis, the veteran McLaren boss who had steered his F1 team through the most successful period in its history.
Sir. Dennis offloaded his stake in a £275m deal. after a bitter dispute with other shareholders.
McLaren declined to comment.