Saudi’s PIF Sells Stake In Mclaren

Saudi Arabia’s sovereign wealth fund, PIF, is selling its stake in McLaren to Bahrain’s state investment fund, Mumtalakat.

According to Sky News, the deal has been completed, reinforcing Bahrain’s status as the biggest shareholder in the British supercar maker and Formula One team-owner.

Mumtalakat has purchased the preference shares in McLaren Group held by PIF and Ares Management.

The transaction, which is a private one between shareholders and will not lead to any new money being injected into the company, will come almost two years after PIF and Ares invested £400m in McLaren as part of a broader fundraising.

The latest deal forms part of efforts by McLaren’s board – led by former Diageo chief Paul Walsh – to tidy up the automotive group’s capital structure.

It is expected to follow the cancellation of the preference shares by raising further equity in the coming months.

PIF’s exit as a shareholder in McLaren comes at a time when the state fund is making big investments into global sport. It has just played a role in the merger between LIV Golf and the PGA Tour, and is now using its financial firepower to strength its domestic football league by signing high-profile players.

Mumtalakat is expected to inject more fund into McLaren in the coming months as the company looks to strengthen its balance sheet.

Earlier this year, the group received a £70m funding boost from investors in the first stage of its wider restructuring plan aimed at steering it into the electric vehicle era.

It emerged late last year that Mumtalakat had acquired part of McLaren’s valuable heritage car collection as part of a further £100m financial commitment to the business.

The most recent injection of funds have been earmarked for investment in McLaren Automotive, with its Racing subsidiary now a standalone entity within the group and not in need of additional financial support.