F1: McLaren Loans from Bank of Bahrain

The McLaren Group has agreed a £150M loan with the National Bank of Bahrain to help ease its financial concerns in the short term.

The company has been very badly affected by the economic issues caused by the coronavirus pandemic, including both the McLaren F1 Team and McLaren Automotive.

The National Bank of Bahrain is 44% owned by the Bahrain sovereign wealth fund Mumtalakat Holding Company, which is in itself a 56% shareholder in McLaren, so the loan is a no-brainer for all parties.

A statement by NBB on Monday said, "The National Bank of Bahrain hereby confirms to the markets that final documentation has been signed and all the necessary approvals have been granted in relation to a GBP 150 million financing facility."

While the loan will be welcomed with open arms, it is by no means a solution to McLaren’s financial issues. However, it does help cover McLaren for the ramping up of operations with the forthcoming return to racing in F1, with the Austrian Grand Prix set to take place this weekend.

McLaren’s first attempt to refinance its operations was blocked by a group of creditors, when they resisted the attempts to release the securities covering McLaren’s heritage cars and properties.

McLaren ended up going to court due to the urgency of the situation in order to make sure the plans to release securities go ahead. They said that if they couldn’t race £280M by July 17th 2020, the McLaren Group would be at risk of insolvency.