TheChek News Flow

British supercar and racing group has raised more than £1bn in past two years to invest in electric cars

McLaren has raised £550m in a deal that makes Saudi Arabia’s Public Investment Fund a minority shareholder in the supercar and racing group.

The UK carmaker has raised more than £1bn in the past two years to help it invest in electric and hybrid cars. Its first entry-level hybrid supercar, the Artura, comes out later in 2021.

About £400m of the latest investment, which was announced on Friday, comes from PIF and Ares Management in the form of preference shares. Both will be minority shareholders following the deal.

A further £150m came from Bahrain’s Mumtalakat, which is an existing investor, as well as new private investors. Some of the money raised will be used to pay back a loan taken out last year during the pandemic. McLaren still has £600m of bonds that mature in the summer.

The company had been in talks since last year to raise about £500m, the Financial Times reported in December.

Kate Ferry, McLaren’s chief financial officer, told the FT on Friday that the deal set the new structure of the business and pushed back any plans of a stock market float into the “medium to long term”.

“This is going to be long-term funding, and it gives us a really good capital structure for the next five years,” she said.

Last year, the group booked a pre-tax loss of £318m, much higher than the £28m a year earlier, after sales halved during 2020.

McLaren is almost unique among luxury brands for its lack of a larger automotive partner, leaving the business to fund new technology from its own resources.

Lamborghini and Bentley are owned by Volkswagen, while Rolls-Royce is owned by BMW, Aston Martin is part-owned by Mercedes-Benz, and Lotus is controlled by China’s Geely.

Saudi Arabia’s PIF also has an investment in electric car group Lucid, which floated recently, but Ferry said there had been “no discussion” about technology sharing between the two.

McLaren, which worked partly with BMW on cells for its hybrid car, is open to other suppliers and partners for future electrical technology.

A major restructuring at McLaren has led to a quarter of jobs being axed, while the company sold off a stake in its racing business to MSP Sports Capital. Ferry said the latest funding meant the company-wide reorganisation was now “done”.

Paul Walsh, McLaren Group’s executive chair, said: “McLaren has taken a number of significant steps to put the company on a stable footing for the long term, with the close support of its advisers and existing shareholders.”

DAX:

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SDAX:

Asian stocks and U.S. futures rallied Monday as some of the concerns over China’s regulatory crackdown eased and progress on a U.S. infrastructure spending plan aided sentiment. Crude oil slid.

Equities jumped in Japan and Australia, where Afterpay Ltd. surged after digital-payments platform Square Inc. agreed to acquire the buy-now, pay-later company. S&P 500 and Nasdaq 100 contractsclimbed as a $550 billion infrastructure package steps closer to passage in the Senate this week.

Hong Kong and China stocks rose after last week’s rout sparked by Beijing’s clampdown on everything from technology to private education and property. The nation also faces a Covid-19 spike and signs of slowing economic growth, spurring bets on monetary easing and a rally in sovereign debt.

Ten-year U.S. Treasury yields and the dollar were steady. Investors are debating whether a months-long rally in Treasuries points to a slower phase ahead in the recovery from the pandemic.

Nikkei +1.91% Hang Seng +0.92% CSI +2.23% Shanghai +1.63% Shenzen +1.70%

Eur$ 1.1873 CNH 6.4657 CNY 6.4636 JPY 109.67 GBP 1.3911 RUB 73.1850 CHF 0.9056 TRY 8.4703

S&P +0.51% Nasdaq +0.54% EuroStoxx +0.55% FTSE +0.39% Dax +0.39% SMI +0.41%

Macro :

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-The almost one-year old federal moratorium on evictions has allowed tenants facing difficult financial conditions from the coronavirus pandemic to stay in their homes. But, now the moratorium is scheduled to expire at midnight on Saturday forcing many into an uncertain future as homeless shelters have been preparing for an influx, adding extra beds.

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