McLaren May Sell Stake in F1 Team to Improve Chances of Survival
With McLaren scrounging for cash and cutting 1,200 positions from its ranks in the hopes of prolonging its own existence, it would be an understatement to claim 2020 has been unkind to the automaker. Most nameplates are having a rough year. And almost all are seeking ways to turn things around before the situation becomes untenable and their fate becomes sealed.
The plan for McLaren involved a £150 million loan from the National Bank of Bahrain and more than a few empty seats.
Autocar now claims the brand has even considered selling part or all of McLaren Applied and Automotive. While the outlet admits this likely hinges on its evolving financial situation, a company insider confirmed advanced discussions are focused on selling a minority stake in the Racing division.
The source also denied rumors that McLaren’s automotive division is on the table, though we imagine everything came up in conversation at least once, given the company’s current balance sheet.
McLaren’s bond holders and board are believed to have given the go-ahead to explore offers of interest in this last week. When approached by Autocar, a McLaren spokesman said: “We are considering the option of additional investors in the Racing business.”
The most recent insight into the McLaren Group’s value — comprising all three divisions of the firm — came two years ago, when Michael Latifi, father of Williams F1 racer Nicolas Latifi, bought a 10 [percent] share for just over £200m, suggesting a valuation of more than £2 billion at that time. However, with the upcoming F1 cost cap imminent, potentially making the team more profitable, it’s possible that valuation, plus the team’s upturn in form, could raise the price of a share in the race team.
Parallel to this, a sale of Applied — a company that uses McLaren’s racing-derived expertise, particularly on data, technology and teamwork, and applies it to everyday industries, most notably in health and public transport – is also believed to be being discussed. However, that’s said to be complex, because of the firm’s reliance on its racing team links in order to thrive.
[Image: F1; McLaren]
Jacob on Jul 06, 2020
McLaren's financial troubles were a predictable result of mediocre performance for most of the last decade. Between 2012 and 2013 Formula 1 seasons, they somehow went from hero (7 wins) to zero (zero wins), and it kept getting worse from then on. In 2014, they couldn't convert their access to the dominant Mercedes engine into good results, even though Williams with more modest resources but the same engine was frequently on podiums. And the 2015-2017 years were the rock bottom for the teams, but they managed to place all blame on the Honda engines. Only when the spell of mediocrity continued into 2018, now with Renault engines, they finally admitted that they screwed up. In 2018-19 they were basically a midfield team, fighting for the title of the best of the rest against Renault. It remains to be seen how they will do this season.
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