McLaren poised to secure loan from National Bank of Bahrain

By Andrew BensonChief F1 writer
The McLaren logo on a sign at a Formula 1 Grand Prix
McLaren are preparing for the start of the delayed 2020 F1 season with the Austrian Grand Prix, 3-5 July

McLaren is poised to secure a loan from a Bahraini bank to solve its cash-flow problems, BBC Sport has learned.

It will help McLaren solve a liquidity shortfall that meant it needed new funds to be injected by mid-July.

The loan, which is set to be approved by the McLaren board, will come from the National Bank of Bahrain (NBB).

NBB is part-owned by Mumtalakat, the Gulf state's sovereign investment fund, which is the majority shareholder in the McLaren Group.

A McLaren spokesperson declined to comment on the development.

The move, first revealed by Sky News, does not preclude McLaren continuing with the legal action it has launched against a group of creditors this month.

McLaren has won an expedited hearing for a case aimed at stopping the trustees of a bond the company launched in 2017 blocking its refinancing plans.

McLaren may continue with the court case to establish what it believes is its right to raise further finance secured against its factory and historic car collection.

McLaren has found itself short of cash as a result of the coronavirus crisis, which has not only lowered revenues from its Formula 1 operation but has had a major impact on the luxury car market, meaning sales of its supercars have dried up.

McLaren said in documents lodged for its court case against the bondholders: "The pandemic has had a massive and detrimental effect on the group's trading performance.

"The start of the F1 season has been delayed. Car dealerships have temporarily closed; supplies have been interrupted; manufacturing has been suspended or impeded; customer orders have declined; sponsorship revenues have fallen and additional costs have arisen from health and safety measures."

This has meant that £291m injected into the business by McLaren's shareholders in March this year has already been spent.

McLaren is also pursuing the possibility of selling a minority stake in the F1 team as it seeks to put the outfit in the best position to be competitive following the introduction for the first time of a budget cap next season.

McLaren last month announced plans to cut 1,200 jobs, the majority in its road-car division, known as Automotive.

About 70 employees will also be made redundant from the F1 team.