McLaren Expects to Sell HQ to Raise Cash
British supercar maker McLaren Group intends to sell its zoomy global headquarters complex.
McLaren Group headquarters in Woking, England.
The company, which sold fewer than 4,700 cars in 2019, has been struggling to stay afloat this year after the COVID-19 pandemic slashed its revenue by nearly 70%.
McLaren raised £300 million ($385 million) through an equity sale early this year. The funds were intended to keep an adjusted version of the company’s five-year product plan on track and deliberately cut production to drawn down dealer inventories and position the business for a robust 2020 sales year.
That plan quickly unraveled as the coronavirus dried up global demand and disrupted McLaren’s supply enough to build some of its models. April-June wholesales slumped to fewer than 300 cars from nearly 1,400 cars in the same period last year.
By summer, McLaren was proposing to put up its headquarters and historic-car collection as collateral for an emergency loan. Creditors rejected that idea. The company opted instead for a 12-month, £150 million ($193 million) loan from the National Bank of Bahrain, an affiliate of its largest shareholder, the Behrain Mumtalakat sovereign fund.
Now the iconic carmaker hopes for an outright sale of its headquarters campus, which includes a tech center and manufacturing facility. The company would then lease back the complex.
The maneuver is not uncommon among companies that are looking for a quick way to bolster their balance sheets (PSA did just that in 2012 in a leaseback deal of its headquarters in Paris).
McLaren is bullish about its long-term performance. But its more immediate priority is squeaking through the remainder of a tough 2020.
The company predicts its revenue this year will plunge more than 60% as factory sales to dealers slump to a mere 1,700 cars. Assuming no significant new wave of COVID-19 infections, the carmaker says its wholesales should double to about 3,400 units in 2021.
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