NBB Admits Negotiations are at Advanced Level to Grant McLaren Loan
2020-06-28 - 3:53 am
Bahrain Mirror: The National Bank of Bahrain stated that in the light of the recent reports, the bank is currently holding discussions with McLaren about credit facilities. These discussions are at an advanced stage and no agreement has been reached so far. However, these discussions may or may not lead to the extension of credit facilities.
Bahrain Mirror published a report in which it wondered who issued the decision to lend the McLaren Company a £280 million loan (BD 131 million)? Why did this happen without guarantees? What are the consequences of this decision?
"The decision to lend McLaren Company has been taken outside Bahrain," a source from the National Bank of Bahrain said, stressing that the issue was not proposed to the bank's administration for negotiations.
News websites have confirmed that McLaren is poised to secure a loan from NBB to solve its cash-flow problems.
A financial analyst believes that the decision was taken by senior officials in the government. "A similar incident took place in 2008 when the Retirement Fund granted Arcapita Bank a $100 million loan to help it face the financial crisis."
"It is a big problem. Although the government is strict in applying the mandatory charter of corporate governance, it doesn't adhere to it," he adds.
There are no records in the Retirement Fund proving that the loan has been paid by Arcapita.
The NBB is 44% owned by the Mumtalakat Holding Company, Bahrain's sovereign wealth fund, which also owns 56% of McLaren.