F1: McLaren Turns to Legal Action for Refinancing

McLaren have successfully applied for fast-tracked legal action in UK courts to help the urgent refinancing the team needs.

The team want to remove the security held over their Woking facilities, and the collection of McLaren heritage race cars, so that they can be used to raise around £280M that it needs in the coming weeks to secure its long term future.

McLaren have argued that the fact they have sought legal action to produce a speedy resolution indicates just how vital the situation is for the team.

If the security were to be lifted, McLaren would be able to lease heritage cars and facilities, and even sell heritage cars to third party members.

An alternative proposal is for the heritage cars to be sold in a newly created subsidiary within the McLaren Group, which would then be able to obtain an asset-backed loan from a third party.

The court documents say, "Whilst the Group has sufficient liquidity to meet its obligations as and when they fall due in the very short term, further liquidity is required to be made available by no later than 17 July 2020. Additional liquidity of approximately £280 million would be sufficient for the Group to be able to support its operations into 2021.

"This state of affairs is not the fault of the Group. Rather, it has been caused by the COVID-19 pandemic – which has wreaked havoc on the UK economy and threatened the livelihoods of millions of people and the viability of many businesses.

"The Proposed Transactions will enable the Group to access the additional liquidity that is required to ensure that the Group can continue as a going concern into 2021. This will provide a significant benefit to the creditors of the Group (by preventing a cash flow crisis and a value destructive insolvency)."