Home Mobile Forum News Cookbook FaceBook Us T-Shirts etc.: Europe/Worldwide. eBay Motorsport Links Advertising  
Site Partners: SpotterGuides Veloce Books  
Related Sites: Your Link Here  

Go Back   TenTenths Motorsport Forum > Single Seater Racing > Formula One


Reply
 
Thread Tools Display Modes
Old 21 May 2020, 19:54 (Ref:3977605)   #1
mogwai
Rookie
 
Join Date: Jan 2004
United Kingdom
Posts: 43
mogwai should be qualifying in the top 10 on the gridmogwai should be qualifying in the top 10 on the grid
McLaren emergency funding hits a snag

Apologies for the spacing on this. It's from a couple different sources.

For those who are interested in this type of thing, originally the plan was for McLaren to receive additional emergency funding. Below is the text of the BBG article earlier this month...further down is the snag...guess the assets are already pledged somewhere else.

If McLaren is facing these issues with what one perceives as the "moral" backstop of a Sovereign Fund (Mumtalakat), then one wonders how William's is holding on.

https://www.bloomberg.com/news/artic...in-new-funding
McLaren Group Ltd., the supercar maker and racing team owner, is seeking about 300 million pounds ($374 million) in fresh funding just months after completing a similarly-sized capital raise, people familiar with the matter said.The British company is working with an adviser as it examines ways to strengthen its finances, according to the people, who asked not to be identified because the information is private.

McLaren said in March that its existing shareholders had put in 300 million pounds of new equity. It also announced it had appointed Paul Walsh, the former chief executive officer of liquor giant Diageo Plc, as its executive chairman.

The company, controlled by sovereign wealth fund Bahrain Mumtalakat Holding Co., has been hit by the coronavirus pandemic which has delayed the Formula 1 racing series and forced it to halt automotive production. Automakers from Daimler AG to Renault SA have cut or scrapped guidance in recent weeks because of lockdowns tied to Covid-19.

Ferrari NV also lowered its earnings guidance for 2020 this week, saying it has seen several order cancellations and expected the reduced number of Formula 1 races to cut into its sponsorship income. U.K. luxury carmaker Aston Martin Lagonda Global Holdings Plc, which has struggled with cash flow, earlier this year raised 536 million pounds from a group led by billionaire Lawrence Stroll. Even after bringing in new investors, the coronavirus crisis has added a level of difficulty to the turnaround put in place with Stroll’s arrival.

McLaren’s 370 million pounds of secured notes due 2022 fell almost 6 pence on the pound Wednesday to a record low of 60.2 pence, according to Bloomberg CBBT prices. The company’s deliberations are at an early stage, and the exact structure of the potential fundraising hasn’t been finalized, the people said.

“Like other businesses we have been severely affected by the current pandemic,” a representative for McLaren said. “We are in continued dialogue with our banks and investors to help navigate these short-term business interruptions.”
McLaren is “looking at a severe liquidity crunch” which will be most acute in the middle of the year, chief financial officer Paul Buddin said on a conference call last month. It is working with its shareholders, relationship banks and advisers to pursue “a number of credible options” for funding, he said.

The company’s ability to sell cars during the second quarter has been severely impacted by the coronavirus outbreak, according to Buddin. While McLaren said that business forecasts are changing daily due to the uncertainty, it’s cutting investments and delaying the introduction of a vehicle based on its new platform to preserve cash.

But that effort has now hit a snag with some selected bondholders saying the assets area already pledged!

From an article on the terminal from earlier today.
"A group of McLaren Group Ltd. bondholders wants to block plans by the supercar maker to raise emergency funds by mortgaging its headquarters and historic car collection, according to people familiar with the matter.

Law firm Paul Hastings, acting on behalf of the creditors, sent a letter to the management of the company on Wednesday stating that the site and the classic cars are already pledged as collateral on $700 million of bonds sold in 2017, the people said, asking not to be named discussing private information.

“The notes benefit from first-ranking security over substantially all of the assets of the issuers and the guarantors, presumably including the heritage cars and the Woking headquarters,” Caitlin Carey, an analyst at credit research firm Covenant Review, said in a note, referring to the town in southern England where McLaren is based.

Here's the real crux of the matter and one wonders how much time they have to sort this out;
"The proposal to transfer the real estate and the historic car collection as a guarantee to new lenders would reduce the security package for existing bondholders and lower their potential recovery in case of insolvency or liquidation, the people said.

Bond holders don't take lightly to having their obligations suddenly put lower in the capital structure so the next few weeks are going to be crunch time it seems. Is it possible we could see McLaren fold before Williams???

Last edited by mogwai; 21 May 2020 at 19:59.
mogwai is offline  
Quote
Old 21 May 2020, 21:19 (Ref:3977617)   #2
S griffin
Veteran
 
Join Date: Jul 2013
Posts: 10,265
S griffin is going for a new lap record!S griffin is going for a new lap record!S griffin is going for a new lap record!S griffin is going for a new lap record!S griffin is going for a new lap record!S griffin is going for a new lap record!
Thanks for this. Not looking good for McLaren. If they are receiving additional emergency budget then they have to plan how they go forward. And Williams need a good year if they are to get anywhere in the future.

McLaren have been lucky to have had partners help them, but if they choose not to help them anymore, they would probably need a buyout to keep them going Iím sorry to say. Letís hope they can find a way to continue

I can see most of the top teams staying, but I wonder now if the Aston Martin deal will still go ahead or if Racing Point will have to continue without it

I just hope McLaren have enough for them to stay. Itís not looking good, but miracles can happen, so we have to keep our fingers crossed, until that proverbial godmother turns up. If it is needed that is
S griffin is offline  
__________________
He who dares wins!
He who hesitates is lost!
Quote
Old 22 May 2020, 07:05 (Ref:3977647)   #3
Armco Bender
Llama Assassin and Sheep Botherer
Veteran
 
Armco Bender's Avatar
 
Join Date: Sep 2002
New Zealand
International Sheep Ambassador
Posts: 4,156
Armco Bender is going for a new world record!Armco Bender is going for a new world record!Armco Bender is going for a new world record!Armco Bender is going for a new world record!Armco Bender is going for a new world record!Armco Bender is going for a new world record!Armco Bender is going for a new world record!
fresh funding = throwing money down a big black hole.
Armco Bender is offline  
Quote
Old 22 May 2020, 07:11 (Ref:3977650)   #4
Peter Mallett
The Honourable Mallett
20KPINAL
 
Peter Mallett's Avatar
 
Join Date: Feb 1999
England
Here and there
Posts: 34,020
Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!
Indeed and with Danny Ric's salary expectations there could be problems ahead.
Peter Mallett is offline  
__________________
In the current circumstances, we need to do all we can to help local businesses. With this in mind I suggest we all schedule our visits to the pub so we can keep the 2m social distancing and whilst there get completely slamied for two hours before handing over to the next shift.

It probably won't stop the virus but nobody would care.
Quote
Old 22 May 2020, 07:21 (Ref:3977652)   #5
peebee2
Veteran
 
Join Date: Dec 2009
Posts: 1,609
peebee2 should be qualifying in the top 10 on the gridpeebee2 should be qualifying in the top 10 on the grid
I gave up trying to understand McLaren’s funding years ago. Not much seems to make sense.
peebee2 is offline  
Quote
Old 22 May 2020, 08:04 (Ref:3977656)   #6
midgetman
Veteran
 
midgetman's Avatar
 
Join Date: Jul 2003
England
Rural Wiltshire
Posts: 5,524
midgetman is going for a new world record!midgetman is going for a new world record!midgetman is going for a new world record!midgetman is going for a new world record!midgetman is going for a new world record!midgetman is going for a new world record!midgetman is going for a new world record!
Jeez so that's £0.6 BILLION just to have a couple of cars racing round in circles 20 times per year?

The world's gone mad.

(OK I realise they have a car manufacturer to support as well, but that's meant to be a self-funding subsidiary.)

Madness. Utter madness.

Sent from my SM-G950F using Tapatalk
midgetman is offline  
__________________
Midgetman - known as Max Tyler to the world. MaxAttaq!
Quote
Old 22 May 2020, 08:17 (Ref:3977657)   #7
Peter Mallett
The Honourable Mallett
20KPINAL
 
Peter Mallett's Avatar
 
Join Date: Feb 1999
England
Here and there
Posts: 34,020
Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!Peter Mallett is the undisputed Champion of the World!
Not so much madness as unsustainable.
Peter Mallett is offline  
Quote
Old 22 May 2020, 08:52 (Ref:3977663)   #8
Casper
Veteran
 
Join Date: May 2007
Posts: 2,345
Casper should be qualifying in the top 10 on the gridCasper should be qualifying in the top 10 on the grid
Quote:
Originally Posted by Peter Mallett View Post
Indeed and with Danny Ric's salary expectations there could be problems ahead.
The F1 division was being funded seperately when the brown stuff hit the fan a few years ago so why should it be treated differently now? I suspect Zac knows exactly what his financial position is right now.
Casper is offline  
Quote
Old 22 May 2020, 14:28 (Ref:3977704)   #9
chillibowl
Veteran
 
chillibowl's Avatar
 
Join Date: Mar 2005
Canada
winnipeg, canada
Posts: 6,893
chillibowl will be entering the Motorsport Hall of Famechillibowl will be entering the Motorsport Hall of Famechillibowl will be entering the Motorsport Hall of Famechillibowl will be entering the Motorsport Hall of Famechillibowl will be entering the Motorsport Hall of Famechillibowl will be entering the Motorsport Hall of Famechillibowl will be entering the Motorsport Hall of Famechillibowl will be entering the Motorsport Hall of Famechillibowl will be entering the Motorsport Hall of Famechillibowl will be entering the Motorsport Hall of Famechillibowl will be entering the Motorsport Hall of Fame
have to say i really like the format and links you provided in your post mogwai! i very much appreciate anytime us regular folk get to peer into the content available through a bloomberg terminal subscription!

cant imagine we will see these stories on the motorsports network!

Quote:
Originally Posted by mogwai View Post
Bond holders don't take lightly to having their obligations suddenly put lower in the capital structure so the next few weeks are going to be crunch time it seems. Is it possible we could see McLaren fold before Williams???
no i can t imagine they like that at all.

obviously i dont know the inner details, but if they went ahead and tried to secure loans with already pledged assets and without the bondholders having prior knowledge, then i would say it looks both desperate and perhaps even a little shady?
chillibowl is offline  
__________________
Take a look at the lawman beating up the wrong guy.
Oh man, wonder if he'll ever know he's in the best selling show.
Is there life on Mars?
Quote
Old 23 May 2020, 10:29 (Ref:3977858)   #10
V8 Fireworks
Veteran
 
V8 Fireworks's Avatar
 
Join Date: Jan 2009
Posts: 1,928
V8 Fireworks should be qualifying in the top 10 on the grid
Quote:
Originally Posted by midgetman View Post
Jeez so that's £0.6 BILLION just to have a couple of cars racing round in circles 20 times per year?
No, it's to prop-up the McLaren supercar business which requires lots of capital for R+D and the like.



McLaren buying experiences are reportedly very poor, as are the resale values, as well as the reliability of the vehicles (even by Supercar standards) -- McLaren needs to address this if they want their vehicles to be seen as a true equal to a Ferrari vehicle:
https://www.youtube.com/watch?v=H7qpUqwLS9o
V8 Fireworks is offline  
Quote
Old 23 May 2020, 12:28 (Ref:3977868)   #11
midgetman
Veteran
 
midgetman's Avatar
 
Join Date: Jul 2003
England
Rural Wiltshire
Posts: 5,524
midgetman is going for a new world record!midgetman is going for a new world record!midgetman is going for a new world record!midgetman is going for a new world record!midgetman is going for a new world record!midgetman is going for a new world record!midgetman is going for a new world record!
Wow, that's even worse! £0.6 billion to prop up a specialist car...what a mess it all is.

Sent from my SM-G950F using Tapatalk
midgetman is offline  
__________________
Midgetman - known as Max Tyler to the world. MaxAttaq!
Quote
Old 23 May 2020, 12:31 (Ref:3977869)   #12
Greem
Subscriber
Veteran
 
Greem's Avatar
 
Join Date: Jul 2009
United Kingdom
Posts: 3,544
Greem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of Fame
It's well worth watching the part 2 video to that McLaren tale. He makes some excellent points in there which back up some of the things in the first video.

Having spent a good chunk of last year as the passenger in a 720S, I'd definitely have one if someone gave it to me
Greem is offline  
__________________
Walk a mile in someone else's shoes.
When they realise you have, you'll be a mile away and you'll have their shoes.
Quote
Old 23 May 2020, 18:16 (Ref:3977925)   #13
Moneyseeker
Subscriber
Veteran
 
Join Date: Mar 2007
Posts: 1,732
Moneyseeker is going for a new lap record!Moneyseeker is going for a new lap record!Moneyseeker is going for a new lap record!Moneyseeker is going for a new lap record!Moneyseeker is going for a new lap record!Moneyseeker is going for a new lap record!
One thing that will emerge from Covid-19 is how ludicrously over leveraged some firms are. I generalising now, but IMO there has been to much focus on shareholder returns over cash building which means great returns for shareholders but weak resilience for the business.
Moneyseeker is offline  
Quote
Old 23 May 2020, 20:12 (Ref:3977939)   #14
Richard Casto
Subscriber
Veteran
 
Richard Casto's Avatar
 
Join Date: Sep 2009
United States
Durham, NC, USA
Posts: 3,547
Richard Casto will be entering the Motorsport Hall of FameRichard Casto will be entering the Motorsport Hall of FameRichard Casto will be entering the Motorsport Hall of FameRichard Casto will be entering the Motorsport Hall of FameRichard Casto will be entering the Motorsport Hall of FameRichard Casto will be entering the Motorsport Hall of FameRichard Casto will be entering the Motorsport Hall of FameRichard Casto will be entering the Motorsport Hall of FameRichard Casto will be entering the Motorsport Hall of FameRichard Casto will be entering the Motorsport Hall of FameRichard Casto will be entering the Motorsport Hall of Fame
Quote:
Originally Posted by Moneyseeker View Post
One thing that will emerge from Covid-19 is how ludicrously over leveraged some firms are.
Yes.

Richard
Richard Casto is online now  
__________________
To paraphrase Mark Twain... "I'm sorry I wrote such a long post; I didn't have time to write a short one."
Quote
Old 23 May 2020, 23:16 (Ref:3977965)   #15
Greem
Subscriber
Veteran
 
Greem's Avatar
 
Join Date: Jul 2009
United Kingdom
Posts: 3,544
Greem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of FameGreem will be entering the Motorsport Hall of Fame
Quote:
Originally Posted by Moneyseeker View Post
One thing that will emerge from Covid-19 is how ludicrously over leveraged some firms are. I generalising now, but IMO there has been to much focus on shareholder returns over cash building which means great returns for shareholders but weak resilience for the business.
I'm sure others can correct me on this, but I have long (mis?) understood the role of a director of a company in which the public have shares is to protect shareholder value above all else - in UK law, at least. This drives the companies towards dividends and bonus culture rather than storing cash, which ultimately weakens them in moments of stress.

(Apple notwithstanding, of course)
Greem is offline  
__________________
Walk a mile in someone else's shoes.
When they realise you have, you'll be a mile away and you'll have their shoes.
Quote
Reply

Bookmarks




Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Will Bathurst get its funding ???? marcus Australasian Touring Cars. 12 18 Jan 2002 10:34


Powered by vBadvanced CMPS v3.2.3

All times are GMT. The time now is 01:24.


Powered by vBulletin® Version 3.8.9
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
Original Website Copyright © 1998-2003 Craig Antil. All Rights Reserved.
Ten-Tenths Motorsport Forums Copyright © 2004-2018 Royalridge Computing. All Rights Reserved.