Car maker to raise £650m in ‘game-changing event’ for luxury brand
Luxury car manufacturer Aston Martin Lagonda is to raise £653m to improve its current cash position and fuel its growth plans.
It also revealed it turned down a £1.3bn investment offer from InvestIndustrial and Geely International last week, concerned it was “an attempt to acquire a controlling and prospectively majority ownership position” which would not have rewarded existing shareholders.
Lawrence Stroll, who became executive chairman in 2020, believes the company has “made significant progress on our journey to become the world’s most desirable, ultra-luxury British performance brand”.
The capital raise will see £78m generated in a share placing, priced at 335p per share, and £575m in a rights issue.
Last night’s closing share price of 421p valued the group at £490m – nearly 90% lower than its £4.3bn valuation when it went public in October 2018.
Global investment fund PIF has become a new anchor investor and the second largest shareholder while the Yew Tree Consortium and Mercedes-Benz have also joined the capital raise.
Stroll said: “This is a game-changing event for Aston Martin, supporting the delivery of our strategic plans and accelerating our long-term growth potential.
“It transforms our balance sheet, liquidity and cashflow profile and provides greater clarity on our pathway to become sustainably free cash flow positive and create significant shareholder value.”
The funding will repay up to half of Aston Martin’s existing debt, improve cash flow by reducing interest costs, and be used for capital expenditure.
It is focused on next year’s next-generation front-engine sports cars, the development of its high margin mid-engine vehicles, including the Valhalla special edition, and delivering its electric platform.
