McLaren/Saudi Arabia: IPO plans take a pit stop

McLaren/Saudi Arabia: IPO plans take a pit stop

Supercar makers such as McLaren all face the same dilemma: how to create the quickest vehicle on the road and out of the showroom. Clocking the shortest time in both brings the most cash flow but requires heavy investment. So does keeping up with electrification trends. High costs explain McLaren's decision to bring in new foreign investors.

The privately owned UK carmaker announced on Friday that Saudi Arabia's Public Investment Fund and private equity group Ares Management of the US will inject £400m of preferred equity as minority holders. Another £150m will come from its majority investor, Bahrain's sovereign wealth fund, plus other new investors. Previous reportsof a possible initial public offering have been put on pause for now.

Britain once fostered its own niche automakers. No longer. Many have had to turn to overseas funds for help or have disappeared. Local hero Morgan Motor Company was acquired two years ago by Italy's Investindustrial "” itself a former stakeholder in Aston Martin. China's Geely controls Lotus. McLaren has held out as an independent, even avoiding partnerships with global car manufacturers.

But finding the cash to produce new models has proved daunting. McLaren's first electric hybrid vehicle arrives later this year. The company pegs