9:14 am, July 15, 2022
Aston Martin today announced an ambitious plan to raise £653m that will help reduce its debt as well as invest in its future.
The Saudi Arabian Public Investment Fund (PIF) will get two seats on the board as it gains a 16.7 per cent stake in the company via an equity placing to the value of £78m.
A £575m underwritten rights issue will see PIF plus Mercedes-Benz and executive chairman Lawrence Stroll’s Yew Tree Consortium – Aston’s largest shareholder – taking up their rights.
They will be investing £335m via the rights issue or the new shares, leaving £318m for other investors via the rights issue, according to the Financial Times, which said Aston Martin was in the red to the tune of £957m as of March 31.
PIF will become Aston Martin’s second-largest shareholder as a result.
Car Dealer reported earlier this month that Saudi Arabia was looking to invest in the Gaydon-based manufacturer.
The rights issue will mean Mercedes’ stake in Aston Martin will drop by two percentage points to 9.7 per cent.
Similarly, Yew Tree’s holding will be reduced by 3.7 percentage points to 18.3 per cent.
Stroll said: ‘Today’s announcement marks the latest success in the evolution of Aston Martin, the restoration of the business and balance sheet we inherited, and the acceleration of our long-term growth potential.
‘I am delighted to welcome the Public Investment Fund as a new anchor shareholder in the company, alongside my consortium.
‘We have a shared vision and our joint participation in this important strategic financing demonstrates both our confidence in the prospects for the company and our commitment to the future success of Aston Martin.
‘I would also like to thank Mercedes-Benz for their continued support and investment as well as the strong long-term partnership we have created.
‘Overall, 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.’
Aston Martin now expects to start making money in 2024 rather than next year, it said.
It also used today’s announcement to the London Stock Exchange to reveal that it had rejected a £1.3bn equity investment proposal from the Atlas Consortium, comprising Geely and Investindustrial, calling it ‘an attempt…to acquire a controlling and prospectively majority ownership position without any premium paid to existing shareholders’.
In addition, the trading update confirmed that Aston Martin’s first fully electric vehicle would be likely to adopt Mercedes tech as well as a Mercedes platform, with more EVs probably arising out of the partnership.
Its interim results for the six months to June 30, 2022 will be announced on July 29.
