McLaren Group, the supercar manufacturer and Formula One team-owner, is in talks to raise hundreds of millions of pounds in new funding aimed at steering the British-based company into the electric vehicle era.
Sky News has learnt that McLaren has opened talks with existing shareholders including the sovereign wealth funds of Bahrain and Saudi Arabia about injecting at least £250m into the business in the coming months.
A final figure has yet to be determined, and one insider said that it was likely to be higher than £250m as the company seeks to fortify its balance sheet until the end of the decade.
News of the potential scale of the fundraising, on which investment bankers at Lazard have been drafted in to advise, comes after McLaren was hit by delivery delays on its new Artura hybrid supercar.
Although the new vehicle has received positive reviews, McLaren is having to implement what it described as “technical upgrades to ensure Artura customers enjoy optimum long-term performance”.
These upgrades have been affected by the supply chain delays hampering global automotive production, forcing the Woking-based company to slow production and customer deliveries of the Artura until the end of the month.
One source pointed out that regardless of the Artura issues, McLaren had always planned to engage with investors about implementing “the right capital structure to support our long-term growth strategy and business plan”.
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Both Mumtalakat Holding, a long-standing McLaren shareholder, and Saudi’s Public Investment Fund, are expected to commit to the new capital-raising.
Ares Management, another McLaren investor, is also likely to be involved.
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It emerged this week that Mumtalakat had acquired part of McLaren’s valuable heritage car collection as part of a further £100m financial commitment to the business.
Insiders said the impending fundraising of at least £250m was in addition to that £100m.
On a third-quarter earnings call this week, McLaren said it was in “in active talks with all shareholders regarding a recapitalization of the group”, although it did not elaborate on the size or structure of a prospective deal.
It was unclear this weekend whether the new funds would be provided in equity, although financial restructuring experts are also said to be involved in the situation.
The funds would be entirely earmarked for McLaren Automotive, with its Racing subsidiary now a standalone entity within the group and not in need of additional financial support.
Earlier this year, McLaren named former Ferrari executive Michael Leiters as the boss of its road-car division.
During the COVID-19 pandemic, the company was forced into a far-reaching restructuring that saw hundreds of jobs axed and substantial sums raised in equity and debt to repair its balance sheet.
In its racing division, which includes the Formula One cars driven this year by Lando Norris and Daniel Ricciardo, McLaren has also witnessed a turnaround under Zak Brown, who leads that arm of the company.
McLaren has also undertaken a series of corporate transactions since the start of the pandemic, when it sought a government loan – a request which was rebuffed by ministers.
Paul Walsh, the former Diageo chief who joined in 2020 as executive chairman, has overseen the sale of a stake in McLaren Racing to a separate group of investors, as well as a £170m sale-and-leaseback of its spectacular Surrey headquarters.
Last year, it also sold McLaren Applied Technologies, which generates revenue from sales to corporate customers.
Founded in 1963 by Bruce McLaren, the group possesses one of the most famous names in British motorsport.
During half a century of competing in F1, it has won the constructors’ championship eight times, while its drivers have included the likes of Mika Hakkinen, Lewis Hamilton, Alain Prost and Ayrton Senna.
In total, the team has won 180 Grands Prix, three Indianapolis 500s and the Le Mans 24 Hours on its debut.
McLaren’s on-track operations account for roughly 20% of the group’s annual revenues.
The company saw its separate divisions reunited following the departure in 2017 of Ron Dennis, the veteran McLaren boss who had steered its F1 team through the most successful period in its history.
Mr Dennis offloaded his stake in a £275m deal following a bitter dispute with fellow shareholders.
This weekend, McLaren declined to comment further on its fundraising talks.
Shares in UK banks have fallen sharply on the back of a report which urges the chancellor to place their profits in her sights at the coming budget.
As Rachel Reeves stares down a growing deficit – estimated at between £20bn-£40bn heading into the autumn – the Institute for Public Policy Research (IPPR) said there was an opportunity for a windfall by closing a loophole.
It recommended a new levy on the interest UK lenders receive from the Bank of England, amounting to £22bn a year, on reserves held as a result of the Bank’s historic quantitative easing, or bond-buying, programme.
It was first introduced at the height of the financial crisis, in 2009.
The left-leaning think-tank said the money received by banks amounted to a subsidy and suggested £8bn could be taken from them annually to pay for public services.
It argued that the loss-making scheme – a consequence of rising interest rates since 2021 – had left taxpayers footing the bill unfairly as the Treasury has to cover any loss.
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Why taxes might go up
The Bank recently estimated the total hit would amount to £115bn over the course of its lifetime.
The publication of the report coincided with a story in the Financial Times which spoke of growing fears within the banking sector that it was firmly in the chancellor’s sights.
Her first budget, in late October last year, put businesses on the hook for the bulk of its tax-raising measures.
Ms Reeves is under pressure to find more money from somewhere as she has ruled out breaking her own fiscal rules to help secure the cash she needs through heightened borrowing.
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Is Labour plotting a ‘wealth tax’?
Other measures understood to be under consideration include a wealth tax, new property tax and a shake-up that could lead to a replacement for council tax.
Analysts at Exane told clients in a note: “In the last couple of years, the chancellor has been protective of the banks and has avoided raising taxes.
“However, public finances may require additional cash and pressures for a bank tax from within the Labour party seem to be rising,” it concluded.
The investor flight saw shares in Lloyds and NatWest plunge by more than 5%. Those for Barclays were more than 4% lower at one stage.
A spokesperson for the Treasury said the best way to strengthen public finances was to speed up economic growth.
“Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms,” they added.
The man dubbed “Britain’s most hated boss” for his controversial policy of sacking hundreds of seafarers and replacing them with cheaper agency staff is to quit.
Sky News can exclusively reveal that Peter Hebblethwaite, the chief executive of P&O Ferries, is leaving the company.
Sources said he had decided to resign for personal reasons.
Mr Hebblethwaite joined the ranks of Britain’s most notorious corporate figures in 2022 when P&O Ferries – a subsidiary of the giant Dubai-based ports operator DP World – said it was sacking 800 staff with immediate effect – some of whom learned their fate via a video message.
The policy, which Mr Hebblethwaite defended to MPs during subsequent select committee hearings, erupted into a national scandal, prompting changes in the law to give workers greater protection.
Under the new legislation, the government plans to tighten collective redundancy requirements for operators of foreign vessels.
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In a statement issued in response to a request from Sky News, a P&O Ferries spokesperson said: “Peter Hebblethwaite has communicated his intention to resign from his position as chief executive officer to dedicate more time to family matters.
Image: Peter Hebblethwaite gives evidence to a committee of MPs in 2022. Pic: PA
“P&O Ferries extends its gratitude to Peter Hebblethwaite for his contributions as CEO over the past four years.
“During his tenure the company navigated the challenges of the COVID-19 pandemic, initiated a path towards financial stability, and introduced the world’s first large double-ended hybrid ferries on the Dover-Calais route, thereby enhancing sustainability.
“We extend our best wishes to him for his future endeavours.”
A source close to the company said it anticipated making an announcement on Mr Hebblethwaite’s successor in the near term.
A former executive at J Sainsbury, Greene King and Alliance Unichem, Mr Hebblethwaite joined P&O Ferries in 2019, before taking over as chief executive in November 2021.
Insiders claimed on Friday that he had “transformed” the business following the bitter blows dealt to its finances by the COVID-19 pandemic and – to some degree – by the impact of Britain’s exit from the European Union.
Image: A union protest is shown at the height of the mass sackings row in 2022
P&O Ferries carries 4.5 million passengers annually on routes between the UK and continental European ports including Calais and Rotterdam.
It also operates a route between Northern Ireland and Scotland, and is a major freight carrier.
The company’s losses soared during the pandemic, with DP World – its sole shareholder – supporting it through hundreds of millions of pounds in loans.
Its most recent accounts, which were significantly delayed, showed a significant reduction in losses in 2023 to just over £90m.
The reduction from the previous year’s figure of almost £250m was partly attributed to cost reduction exercises.
The accounts also showed that Mr Hebblethwaite received a pay package of £683,000, including a bonus of £183,000.
“I reflected on accepting that payment, but ultimately I did decide to accept it,” he told MPs.
“I do recognise it is not a decision that everybody would have made.”
The row over his pay was especially acute because of his admission that P&O Ferries’ lowest-paid seafarers received hourly pay of just £4.87.
Mr Hebblethwaite had argued since the mass sackings of 2022 that the company would have gone bust without the drastic cost-cutting that it entailed.
The company insisted at the time that those affected by the redundancies had been offered “enhanced” packages to leave.
Last October, the then transport secretary, Louise Haigh, said: “The mass sacking by P&O Ferries was a national scandal which can never be allowed to happen again,” adding that measures to protect seafarers from “rogue employers” would prevent a repetition.
“This issue has been ignored for over 2 years, but this new government is moving fast and bringing forward measures within 100 days,” Ms Haigh added.
“We are closing the legal loophole that P&O Ferries exploited when they sacked almost 800 dedicated seafarers and replaced them with low-paid agency workers and we are requiring operators to pay the equivalent of National Minimum Wage in UK waters.
“Make no mistake – this is good for workers and good for business.”
The minister’s description of P&O Ferries as “rogue”, and suggestion that consumers should boycott the company, sparked a row which threatened to overshadow the government’s International Investment Summit last October.
Sky News’s business and economics correspondent, Paul Kelso, revealed that DP World had withdrawn from participating in the event, and paused a £1bn investment announcement.
The company relented after Sir Keir Starmer publicly distanced the government from Ms Haigh’s characterisation of DP World.
Donald Trump has cancelled a loophole from today that had allowed consumers and businesses to be spared duties for sending low-value goods to the United States.
The so-called de minimis exemption had applied across the world before Trump 2.0 but the president has taken action – and the UK may soon follow suit – as part of his trade war.
The relief had allowed goods worth less than $800 (£595) to enter the US duty-free since 2016.
But now, low-cost packages face the same tariff rate as other, more expensive, goods.
The reasons for the latest bout of protectionism are numerous and the ramifications are country and purpose specific.
What is changing?
It was no accident that China was the first destination to be slapped with this rule change.
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The duty exemption on low-value Chinese goods was ended in May as US retailers, in fact those across the Western world, complained bitterly that they were being undercut by cheap clothing, accessories and household goods shipped by the likes of Shein and Temu.
From today, Mr Trump is expanding the end of the de minimis rule to the rest of the world.
Why is Trump doing this?
Image: Number of de minimis packages imported in to the US since 2018
The president is not acting purely to protect US businesses.
More duties mean more money for his tariff treasure chest, bolstering the goodies already pouring in from his base and reciprocal tariffs imposed on trading partners globally this year.
The Trump administration has also called out “deceptive shipping practices, illegal material and duty circumvention”.
It also believes many parcels claiming to contain low-value goods have been used to fuel the country’s supplies of fentanyl, with the importation of the illegal drug being used by the president as a reason for his wider trade war against allies including Canada.
How will it apply?
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New tariffs threaten fresh trade chaos
Under the new rules, only letters and personal gifts worth less than $100 (£74) will still be free of import duties.
Charges will depend on the tariff regime facing the country from where the goods are sent.
Fox example, a parcel containing products worth $600 would raise $180 in extra duties when sent from a country facing a 30% tariff rate.
It has sparked chaos in many countries, with postal services in places including Japan, Germany and Australia refusing to accept many items for delivery to the US until the practicalities of the new regime become clearer.
What about the UK?
All goods not meeting the £74 exemption criteria now face a 10% charge because that is the baseline tariff the US has slapped on imports from the UK.
We were spared, if you remember, higher reciprocal tariffs under the so-called “trade deal”.
How will the process work?
All shipping and delivery companies will be wading through the changes, with the big international operators such as DHL, FedEx and the like all promising to navigate the challenge.
Royal Mail said on Thursday that it would be the first international postal service to have a dedicated operation.
It said consumers could use its new postal delivery duties paid (PDDP) services both online and at Post Offices.
But it explained that business customers faced different restrictions to individuals.
Businesses would be charged a handling fee per parcel to cover additional costs and duties would be calculated based on where items were originally manufactured.
While business account customers could be handed an invoice for the duties, it explained that consumers would have to pay at the point of buying postage.
No customs declaration would be required, it concluded, for personal correspondence.
Is the US alone in doing this?
The answer is no, but it remains a fairly widespread relief globally.
The European Union, for example, removed de minimis breaks back in 2021, making all e-commerce imports to the bloc subject to VAT.
It is also now planning to introduce a fee of €2 on goods worth €150 or less to cover the costs of customs processing.
Should the UK do the same?
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9:00
July: The value of ‘de minimis’ imports into Britain
The UK has been under pressure for many years to follow suit and drop its own £135 duty-free threshold as retailers battle the cheap e-commerce competition from China we mentioned earlier.
A review was announced by the chancellor in April.
Sky News revealed in July how the total declared trade value of de minimis imports into the UK in the 2024-25 financial year was £5.9bn – a 53% increase on the previous 12-month period.
Any rise in revenue would be welcomed, not only by UK retailers, but by Rachel Reeves too as she looks to fill a renewed black hole in the public finances.