Bahrain’s sovereign wealth fund is taking full ownership of McLaren Group as part of long-term plans to secure a partnership with a global industry giant.
Sky News has learned that Mumtalakat, the Gulf state’s investment fund, is close to reaching an agreement with McLaren’s remaining minority shareholders to convert its shares into warrant-like instruments.
The new contracts will have the economic rights to take advantage of a long-term “liquidity event” such as a McLaren IPO, but will be classified as shares.
One bank said it expected the deal to be announced later this week.
This would involve the conversion of around 20 cents of McLaren’s capital into new contracts and leave the state of Bahrain as the sole shareholder of the team that owns the Formula 1 team.
McLaren Racing, the department that directly houses F1 and other racing operations, has its own external shareholders following a deal reached during the pandemic to raise capital.
The deal to be signed this week underlines Mumtalakat’s continued confidence and leadership in McLaren’s recovery, according to an expert.
The Woking-based company’s complicated monetary design has had a crippling effect on the ability of global automotive teams to establish a long-term partnership with it in recent years.
Simplifying this design will likely pave the way for a generational partnership with an automotive original equipment manufacturer (OEM) in the coming years, as McLaren evolves into a hybrid and electric vehicle company.
Earlier this year, Mumtalakat acquired McLaren’s stakes from Saudi sovereign wealth fund and Ares Management, a major U. S. -based financial investor.
More recently, the Bahrain-based fund was reported to have injected another £80m into the company, which makes the Artura super-car.
McLaren suffered delays in the delivery of the Artura, which, while garnering positive reviews, required a number of technical improvements.
Last year, McLaren appointed former Ferrari Michael Leiters head of its road car division.
During the Covid-19 pandemic, the company was forced to undertake a far-reaching restructuring that resulted in the elimination of many jobs and the raising of very significant sums of equity and debt to improve its balance sheet.
In its racing division, which includes the Formula 1 cars driven this year by Lando Norris and Oscar Piastri, McLaren has witnessed a turnaround under Zak Brown, who leads that arm of the company, as well.
McLaren has also made a number of corporate transactions since the start of the pandemic, when it applied for a loan from the government, a request that ministers rejected.
Walsh oversaw the sale of a stake in McLaren Racing to an independent organisation of investors, as well as the subsequent £170 million sale and lease of its impressive Surrey headquarters. In 2021, it also sold McLaren Applied Technologies, which generates profits from corporate sales.
Founded in 1963 by Bruce McLaren, the group is one of the most prominent in British motorsport. In a century of F1 competition, it won the constructors’ championship eight times, while its drivers included Mika Hakkinen, Lewis Hamilton, Alain Prost and Ayrton Senna.
In total, the team won Grand Prix, 3,000 Indianapolis 500s and the 24 Hours of Le Mans in its early days.
The company saw its separate divisions reunited after the departure in 2017 of Ron Dennis, the veteran McLaren boss who had led his F1 team through the most successful era in its history. Dennis sold his stake in a £275 million deal following a bitter dispute with other shareholders.
Sky Sports News has contacted McLaren for comment.