McLaren is expected to solve its cash flow problems by approving a loan from the National Bank of Bahrain, BBC and Sky News report.
Earlier this week, it emerged the Woking-based company was facing the prospect of running out of money as soon as July 17 due to the impact from the coronavirus.
This comes despite raising almost £300m back in March, implemented cost-saving measures such as furloughing staff and making 1200 job cuts and is reportedly considering the sale of up to a 30 per cent stake in its Racing division.
McLaren has been trying to raise the £275m it currently needs through releasing security in its assets, namely its factory and collection of classic cars.
However, a group of noteholders who already lay claim to them has opposed the move and now both parties are expected in court next week to argue their case.
“The pandemic has had a massive and detrimental effect on the group’s trading performance,” documents submitted by McLaren read.
“The start of the F1 season has been delayed. Car dealerships have temporarily closed; supplies have been interrupted; manufacturing has been suspended or impeded; customer orders have declined; sponsorship revenues have fallen and additional costs have arisen from health and safety measures.”
Given the tight timescale though, McLaren has sought relief elsewhere and has now got it through the National Bank of Bahrain, who are partly owned by majority McLaren shareholders Mumtalakat.
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It is believed the loan will keep the historic F1 brand in operation until early 2021 by which time, it is hoped the worse of Covid-19 will have long gone.
The court action is expected to continue despite the new funding, with McLaren keen to reaffirm it was right to believe the assets could be used as security to obtain emergency funding.
However, the potential risk of insolvency has now seemingly passed.
