The luxury car manufacturer Aston Martin Lagonda announced on Friday a capital increase of 653 million pounds (756.7 million francs) following which the Saudi sovereign wealth fund Public Investment Fund (PIF) will become its second shareholder.
Up to half of this inflow of fresh money will be used to “significantly deleverage” the group, the manufacturer announced to calm recent market concerns regarding its finances.
Its net debt was 957 million pounds at March 31, up by a third year on year.
The rest will notably support investment ‘in an operational environment which remains difficult, impacted by the war in Ukraine, the confinements linked to Covid-19 in China and the persistent disruptions of supply chains’, added the group in a statement.
Investors cheered on Friday and the title jumped 20.66% to 448 pence around 10:00 GMT in London – but it remains down more than 65% since the start of the year.
Saved from bankruptcy in early 2020 by Canadian billionaire Lawrence Stroll, its first shareholder who became executive chairman, James Bond’s favorite brand is now seeking to evolve even further towards luxury and initiate the shift towards electrification.
A sum of 335 million pounds of the total capital increase will be provided by the PIF, the Yew Tree Consortium – a group of investors led by Lawrence Stroll – as well as Mercedes-Benz AG.
Competing offers rejected
The Saudi sovereign wealth fund alone will invest 78 million and will hold at the end of the operation regarding 16.7% of the capital. Yew Tree will retain regarding 18.3%.
Aston Martin also announces that it has rejected a competing offer from the European fund Investindustrial and the Chinese manufacturer Geely for a firm placement of 203 million pounds in capital, followed by a subsequent issue of 1.1 billion.
The proposal ‘grossly overestimated the new capital needs of the company’, argued Aston Martin, which further considered ‘that it was an attempt (…) to acquire a position of control and potentially majority.
Aston Martin has accumulated disappointments since its failed IPO in London at the end of 2018. The manufacturer announced in May the departure of its managing director, Tobias Moers, replaced by the former boss of Ferrari, Amedeo Felisa, while his loss s was dug in the first quarter.
Aston Martin Lagonda, which remains behind in the electrification of its models, had however halved its losses in 2021, driven by a strong acceleration in sales with the lifting of restrictions linked to the pandemic.
/ATS