McLaren F1 Resorting to Drastic Financial Measures Amid Coronavirus Crisis
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The coronavirus crisis has had a major impact on the world’s health, but there has also been a huge financial clout. McLaren is one of the worst-affected groups, and tried to seek financial aid from the government. After rejection, the company is now resorting to drastic measures, like mortgaging its Woking headquarters and their historic car collection.
According to Sky News, the British manufacturer hopes to raise up to £275 million to ease the financial strain of the outbreak. Apparently, McLaren’s historic car collection is worth more than £250 million. Meanwhile, the McLaren Technology Center building is estimated to be worth over £200 million.
Furthermore, the automobile giants can also raise funds through new bonds, courtesy existing or new bondholders. Sources insisted that the company would repay the funds “at the earliest opportunity.”
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Why did the government deny a loan for McLaren?
Earlier, McLaren approached the government for a £150 million loan after sales collapsed, owing to the COVID-19 outbreak. As per government officials, the company had not exhausted alternative sources of financing, hence the rejection. In March, the automaker’s shareholders injected £300 million of equity into the company.
“Like many other British businesses McLaren has been severely affected by the current pandemic and we are therefore exploring a variety of different funding options to help navigate these short-term business interruptions,” a company spokesman said.
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While McLaren seems to be in trouble, fellow supercar maker, Ferrari, is fairing a lot better. The Italian giants have managed to achieve a 5% delivery increase to 2,738 units. Meanwhile, the company’s revenue fell to only $1.02 billion. This far exceeded analysts’ expectations of $852 million in the first quarter of 2020. For the moment, the Italian brand’s performance in the second quarter will be interesting to note.
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