McLaren, the British supercar manufacturer, is in talks to raise up to £500m in fresh equity that could pave the way to a listing though a blank-cheque company.
A deal with a special purpose acquisition company, or Spac, which is specifically used to take a private group public through a reverse merger, is one of the options the carmaker is considering to raise cash.
The pandemic hit group, which has a long and illustrious racing heritage, wants to shore up and refinance its business over the coming 12 months.
This includes the possible sale of a minority stake in its racing arm, and looking at options for the future of its applied division, which sells racing and car technology to third parties.
After laying off a quarter of its staff during the pandemic and raising emergency funding in the summer, the company is seeking ways to cut its debt pile before refinancing bonds that mature in 2022, Mike Flewitt, McLaren Automotive chief executive, told the Financial Times.
“We need to restructure the total business,” he said. “We went into this year having two very successful years in automotive, but the total business did not have the liquidity to survive this kind of crisis.”
McLaren’s sales in the first nine months of the year fell more than 60 per cent to £389.2m, with its pre-tax loss swelling to £312.9m from £68.2m a year earlier. The automotive unit, which Mr Flewitt leads, accounts for more than 80 per cent of the business.
The company is in talks with several parties about raising £300m to £500m in equity over the next few months.
The business is “not ruling anyone out” and is considering investments from “individuals, family groups, sovereign wealth funds and private equity”, as well as at least one US-based Spac, he said.
A deal with a Spac, which have become one of the most popular ways of fundraising in the past year, would put McLaren alongside Aston Martin and Ferrari as a publicly listed supercar group.
Mr Flewitt said floating through a merger with a Spac was not out of the question, but that McLaren’s investors will decide on the most appropriate new shareholder.
“We will look for investors who have a common vision to our shareholder base, both in terms of the structure, direction of the company, and medium-term plans,” he said.
In parallel with the equity talks, McLaren is also pressing on with a sale and leaseback of its headquarters in Woking, which would reduce the amount of money it needs to raise through an equity injection.
The cash raised will be used to pay down debt, which stands at £661m at the end of the third quarter, after the company raised £150m in an emergency loan in the summer.
Having paid down some of the debt, the company will then seek to refinance the remaining bonds during next year, he said.
Selling a minority stake in the racing team will bring in extra funding to the unit, though McLaren will seek to retain a majority stake and control of the division if a deal goes ahead.
It is also looking at options for its applied division, which could result in the slimming down of the unit.
The company, which uniquely among competitors Ferrari, Lamborghini and Aston Martin does not have a partnership with a larger carmaker, has to foot the bill for most of its technology development itself.
The group just spent close to £400m on a hybrid system that will underpin its future cars as it plots a shift away from pure internal combustion engine technology, beginning with the Artura supercar to be revealed next year.
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