Bahrain's sovereign wealth fund Mumtalakat said on Tuesday that luxury automaker McLaren Group's shareholders have approved a full recapitalisation of the group.

The recapitalisation will introduce a simplified share structure, a streamlined governance process and expansion to new markets, according to Mumtalakat.

Earlier in the day, Sky News reported that the fund is in talks about a deal with minority investors of McLaren Group that would effectively see the fund becoming McLaren's sole owner.

The agreement could be announced as soon as this week as part of a deal and would involve about 20% of the equity in McLaren being converted into new contracts, the report said.

The new contracts will have the economic rights to benefit from a future "liquidity event" such as an initial public offering of McLaren, but would not be classed as shares, according to Sky News.

McLaren Group did not immediately respond to a Reuters request for comment.

Mumtalakat in June said it had expanded its stake in McLaren Group, which includes the British supercar maker and McLaren Racing.

The sovereign wealth fund bought shares and warrants worth 400 million pounds ($508.92 million) in McLaren from Saudi Arabia's Public Investment Fund (PIF) and Ares Management Sky News reported in June.

Mumtalakat, which has a 60% stake in McLaren, expects the British company to go public in two to three years, its chief executive told Reuters in June last year.

($1 = 0.7860 pounds)

(Reporting by Chandni Shah in Bengaluru and Alexander Cornwell in Dubai; Editing by Lisa Shumaker)