Bloomberg News Agency has recently revealed that McLaren Group Ltd, which faces serve finical problems, has received commitments for £125 million ($150 million) of convertible preference shares from its owners. Shareholders include the Saudi Arabia’s Public Investment Fund.
McLaren has struggled to recover from the pandemic and faced delays in launching its newest supercar, the Artura. The company’s available cash plunged 56% since the start of the year, dropping to £58 million at the end of the first quarter.
For its part, the Finical Times revealed that Saudi Arabia’s Public Investment Fund is in talks with Aston Martin about taking a stake in the business, as the luxury carmaker seeks to raise additional finances for its next range of cars. Talks are at an early stage, they added.
Aston is facing the challenge of funding its next generation of sports cars, and its first push into electric vehicles, at a time when the business is saddled with debt and producing no net cash.
The company does not expect to begin generating cash until 2023, and one of Aston’s first priorities is to start paying down some of its high-interest debt.
The group has £957mn of net debt at the end of March, and expects to pay about £130mn in debt interest this year.
Along the same line, business magnate Elon Musk predicted, in an interview with Wccftech website, the imminent bankruptcy of Lucid Group, an eventuality that totally ignores the crucial Saudi backing.
The Saudis have already provided Lucid Group with around $3.2 billion in incentives for the facility, which, when completed, will have the capacity to produce 155,000 units per annum. Moreover, the Kingdom has also signed a massive order of up to 100,000 EVs from Lucid Group, giving the company a much-needed demand boost as it continues to find its footing.
With the Saudi PIF continuing to maintain a gargantuan stake in Lucid Group, it is a bit disingenuous to claim that the Kingdom would not open its cash repositories – which are currently filled to the brim with oil-infused liquidity – to rescue the company should it need an emergency cash infusion. In fact, Lucid Group just announced a $1 billion revolving credit facility to meet its liquidity needs.
These losing investments confirm the crown prince's lack of experience and impetuousness in dealing with mega-projects worth hundreds of billions of dollars, which only brought more losses to the Saudi coffers.
