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McLaren to cut 1,200 jobs as Covid-19 prompts restructuring
McLaren will cut 1,200 jobs in a major restructuring after coronavirus shut down the company’s showrooms and prevented it from racing.
The group, which operates an automotive business making supercars as well as a racing division and a unit selling engineering technology, employs around 4,000, mainly based in the UK.
Up to three-quarters of its staff are based within the automotive division, which makes around 4,000 supercars a year. The rest are split between its technology and racing units and back office functions.
“Like many other businesses, McLaren has been severely affected by the current pandemic,” the group said on Tuesday.
“The cancellation of motorsport events, the suspension of manufacturing and retail activities around the world and reduced demand for technology solutions have all led to a sudden impact on the group’s revenue generating activities”.
McLaren is attempting to raise £250m in a bond offering to help shore up its finances, offering a mortgage of its space-age headquarters in Woking and a fleet of heritage cars to secure the deal.
But the move has ignited the ire of investors in a £525m bond issued in 2017, who claim the assets were already put up by the company on their bond.
Last year the business made a pre-tax loss of £28m, a significant reduction on the £67m loss a year earlier, with revenues that were 18 per cent higher at £1.5bn.
The group made operating earnings of £177m, and had net debt of £572m at the end of 2019. The company is due to release first quarter trading figures later this week.
“This is undoubtedly a challenging time for our company, and particularly our people, but we plan to emerge as an efficient, sustainable business with a clear course for returning to growth,” said McLaren Group’s executive chairman Paul Walsh.