Aston Martin Lagonda has announced plans to raise £653 million via a placing and rights issue that will result in Saudi Arabia’s sovereign wealth fund becoming the luxury carmaker’s second largest shareholder.
The kingdom’s Public Investment Fund will invest £78 million for a holding of just under 17 per cent and a seat on the board.
Yew Tree consortium, controlled by Lawrence Stroll, Aston Martin’s executive chairman, which holds a 22 per cent stake, and Mercedes-Benz will take up their options to inject a further £161 million, the remaining £318 million of outstanding shares being offered in a public rights issue.
Stroll, 63, said that the latest raise would transform the group’s balance sheet, liquidity and cashflow profile. “With the new leadership team in place, led by Amedeo Felisa, we have the right team and the right strategy to fully realise the long-term potential of Aston Martin,” he added.
The group held £957 million of net debt at the end of March. The board believes the raise will support the company’s target of hitting 10,000 sales in three years, generating £2 billion revenue and £500 million in adjusted earnings.
Alongside the fundraising Aston Martin disclosed that Investindustrial Group, which took the marque to the market in 2018, tabled a proposal this month that would have injected £1.3 billion alongside Geely International. “The board . . . does not believe that the proposal presented an attractive funding option or value creation opportunity for existing shareholders,” the company said.
It said the proposal “markedly overestimated the company’s new equity capital requirements, would have been heavily dilutive for existing shareholders and comprised a number of execution obstacles”, adding that “there is no basis for further discussion”.
Aston Martin was set up 107 years ago and has become one of Britain’s most famous marques but it has long been financially troubled and had gone bankrupt seven times before it was listed on the stock market in 2018. It has tapped shareholders for cash three times since it floated at £19 a share with a combination of discounted placings and a rights issue that have diluted investors.
As well as shoring up the balance sheet it has been seeking additional funding to develop its next-generation front-engine sports cars and as it prepares to move into electric models with plans to release its first battery-powered sports car in 2025.
Stroll has an existing relationship with the Saudi Arabian oil company Aramco, which joined Aston Martin’s Formula One team as a named partner earlier this year.
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Aston Martin to raise £635m with Saudi Wealth Fund help