McLaren could mortgage MTC and historic collection to raise funds

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The McLaren Group is considering mortgaging its Woking headquarters as well as its historic cars collection to keep itself afloat amid the coronavirus crisis.

The group which includes McLaren automotive business as well as its Formula 1 team is seeking to raise up to £275 million with its advisor, Wall Street financial institution JP Morgan, according to Sky News.

McLaren initiated its quest for a cash influx after the company was denied a £150 million loan from the British government which it had sought to help it deal with a sudden drop in the sales of its range of supercars following the onslaught of the coronavirus pandemic.

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But Formula 1's standstill and disrupted season has also wreaked havoc on the revenue McLaren derives from the sport, a shortfall that only adds to its financial predicament.

In March, the McLaren Group's main shareholders led by Mumtalakat, Bahrain's sovereign wealth fund , injected £300 million into the company, demonstrating their long-term commitment to Mclaren's business which employs approximately 4,000 people, many of which have been temporarily furloughed under Britain's Coronavirus Job Retention Scheme.

"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," said a spokesman for the company.

McLaren's famed state-of-the-art Technology Center located at Woking is estimated to be worth £200 million.

But McLaren's vast collection of historic cars - many of which enjoy a championship-winning pedigree and were driven by the likes of Niki Lauda, Alain Prost, Ayrton Senna or Lewis Hamilon - is believed to be valued at over £250 million.

JP Morgan is reportedly advising McLaren to raise capital by conducting a bond offering with existing bond holders and investors, with the bonds to be redeemed as soon as the company's revenues recover to a normal level.

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Phillip van Osten

Motor racing was a backdrop from the outset in Phillip van Osten's life. Born in Southern California, Phillip grew up with the sights and sounds of fast cars thanks to his father, Dick van Osten, an editor and writer for Auto Speed and Sport and Motor Trend. Phillip's passion for racing grew even more when his family moved to Europe and he became acquainted with the extraordinary world of Grand Prix racing. He was an early contributor to the monthly French F1i Magazine, often providing a historic or business perspective on Formula 1's affairs. In 2012, he co-authored along with fellow journalist Pierre Van Vliet the English-language adaptation of a limited edition book devoted to the great Belgian driver Jacky Ickx. He also authored "The American Legacy in Formula 1", a book which recounts the trials and tribulations of American drivers in Grand Prix racing. Phillip is also a commentator for Belgian broadcaster Be.TV for the US Indycar series.