F1 News: Despite losing shirt Bahrainis take control of McLaren Group (Update)

Bahrain’s sovereign wealth fund has taken full ownership of the McLaren Group, which builds high-end sportscars and owns a majority stake in the McLaren F1 team.

The Bahraini fund, Mumtalakat, was already McLaren’s biggest shareholder.

The deal follows a period of deep financial uncertainty for the British company, which has been making heavy losses.

McLaren hailed it as a “major milestone”.

The company is now understood to be looking at technical partnerships with other businesses, to help it develop electric vehicle technology.

“We are delighted at Mumtalakat’s continued commitment to McLaren through this deal,” McLaren Group’s executive chairman Paul Walsh said in a statement.

“This will further enable us to focus on delivering our long-term business plan, including investment in new products and technologies, while continuing to explore potential technical partnerships with industry partners.”

Prior to that announcement, McLaren’s F1 team CEO Zak Brown said he had extended his contract to stay in that position all the way until 2030.

“It’s a privilege to work alongside the talented men and women across McLaren Racing’s different race series,” said the American.

After years of financial struggles, Bahrain’s Mumtalakat is looking to sell its stake in  British sportscar manufacturer McLaren Group, which also owns most of McLaren F1.

Bahrain’s Mumtalakat, the sovereign wealth fund holding a controlling stake in McLaren Group, has reportedly hired Wall Street bankers to find a new buyer following an order from Bahrain’s King Hamad bin Isa Al Khalifa.

The McLaren Group controls McLaren Automotive and is the majority owner of McLaren Racing having sold up to a third of the company that races in F1, IndyCar, Formula E and Extreme E to US investment company MSP Capital in late 2020.

What effect the sale by Mumtalakat will have on the McLaren F1 and IndyCar teams remains to be seen – depending on who buys it.

Sources close to McLaren suggest discussions are still in their early stages and various options are on the table. Potential partners extend beyond traditional car manufacturers, and the final outcome might not even involve an equity sale.

Intriguingly, Middle Eastern sources claim JP Morgan has been specifically instructed by Mumtalakat to find Chinese buyers after the acquisition of stakes in other luxury car brands, such as Lotus.

Another option is to spin off the racing entity that could be purchased by any number of interested buyers.

It’s quite possible McLaren Racing would no longer be owned by an automotive manufacturer, unless a company like Porsche were to buy it.

After Porsche failed to enter F1 with Red Bull, this could be another opportunity to buy a F1 team and rebrand it Porsche. The famous McLaren racing heritage would then be gone.

This move comes after McLaren was forced to rely heavily on financial backing from Mumtalakat to stay afloat in the wake of the pandemic and ongoing financial struggles.

The decision to explore a sale follows months after shareholders approved a complete recapitalization of McLaren. This involved converting 20 percent of existing equity into new contracts, leaving Mumtalakat as the sole shareholder.

Mounting losses for the carmaker – which more than doubled to £349 million in 2022 compared to the previous year – appear to have strained Mumtalakat’s patience.

Now Bahrain’s fund reportedly hired Wall Street giant JP Morgan to find a buyer after injecting £1.5 billion into McLaren over the past four years alone.

Rumor has it they are looking to invest their sovereign wealth fund in Bitcoin instead – far better returns.

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