Geely acquires stake in Aston Martin
£654m funding raise is now complete, with a little help from China
Back in July Aston Martin announced a plan to raise £653m to help with model development and deal with some debt. Or ‘meaningfully deleverage its balance sheet’, in finance talk. Encouragingly, the equity capital raise has already been successful, less than three months after it was announced.
According to Aston Martin the amount raised is now £654m, from Mercedes-Benz, the Yew Tree Consortium and Saudi Arabia’s Public Investment Fund. But the most notable detail of today’s announcement is the involvement of Geely Holding. The Chinese company that already owns majority stakes in Volvo, Lotus and Polestar is now a shareholder in Aston Martin. Which feels pretty significant, given its influence elsewhere.
Geely’s role in proceedings is reserved for the last line of the press release. “Finally, I would like to welcome Geely Holding, who today have announced that they have become a shareholder”, said Lawrence Stroll. And that’s really it. For reference, the capital raise plan is going to see the Public Investment Fund become an 18.7 per cent stakeholder, with Stroll’s Yew Tree Consortium taking 19 per cent; the original plan was for Mercedes to have 9.7 per cent, though it hasn’t been indicated if that has changed yet (the provisional figures in July for the other two were lower). Geely’s stake will be a minor one at 7.6 per cent, but it shows perseverance on its part; back in July Aston had confirmed that a £1.3bn funding offer was made by Atlas Consortium, led by Morgan owners InvestIndustrial and Geely. This clearly isn’t the same kind of offer, but it does mean a foot in Gaydon’s door.
The involvement of Geely at Aston - however minor for the moment - must be good news for a brand under pressure. If not exactly similar, it’s hard not to look at the plight of Lotus for ready-made comparison. But Aston’s situation is admittedly very different to the one that faced Hethel - or Geely’s ultimate intentions for the smaller manufacturer. Where it sees its stake in the older brand going is an intriguing one for the future.
Speaking of the capital raise completion, Lawrence Stroll said: "I am delighted that we have successfully completed this transformational capital raise which significantly strengthens our financial position and enhances our pathway to becoming sustainably free cash flow positive. Along with Amedeo and the leadership team, we are fully focused on unlocking the significant shareholder value creation potential of this ultra-luxury British performance brand.
"I would like to thank our existing shareholders for their continued support in reaching this important milestone. The Yew Tree Consortium's shareholding now stands at 19% following its full participation in the rights issue and additional investment through the capital raise. I would also like to thank Mercedes-Benz for their investment and the strong long-term partnership we have created.”
ked over as the earlier ones who've lost both their cash and equity. Make no mistake, the money to invest ultimately comes from the state itself and Chinese state interference follows.
From 2018 Financial times article. ( https://www.ft.com/content/a9fcd724-1bbc-11e8-aaca... )
Daimler’s political sensitivity to the Chinese market was underscored this month when the company came under fire for posting an inspirational quote from the Dalai Lama on its Instagram account.
Within days Daimler had issued two formal apologies, including a letter from executives saying that Daimler “deeply regrets the hurt and grief that its negligent and insensitive mistake has caused to the Chinese people”.
It is interesting that Mercedes has reduced it's investment.
Once Lance Stroll realises his son will not be an F1 champion then he will withdraw, especially as his competence is in clothing.
The City and it's representatives pushed for brexit. The City is a crucible for international and domestic finance, yet when it comes to manufacturing, it is seems entirely blind, even though manufacturing, like no other industry drives a country's development.
So engines, drivetrains and interiors from a company reducing it's investment, an investor not in it for the company and two dictatorships now investing. Not a great look but perhaps being too cynical.
Shame really because, apart from the abomination they have to produce, they are in a pretty good place productwise.
It is interesting that Mercedes has reduced it's investment.
Once Lance Stroll realises his son will not be an F1 champion then he will withdraw, especially as his competence is in clothing.
The City and it's representatives pushed for brexit. The City is a crucible for international and domestic finance, yet when it comes to manufacturing, it is seems entirely blind, even though manufacturing, like no other industry drives a country's development.
So engines, drivetrains and interiors from a company reducing it's investment, an investor not in it for the company and two dictatorships now investing. Not a great look but perhaps being too cynical.
Shame really because, apart from the abomination they have to produce, they are in a pretty good place productwise.
Make no mistake, the money to invest ultimately comes from the state itself and Chinese state interference follows.
From 2018 Financial times article. ( https://www.ft.com/content/a9fcd724-1bbc-11e8-aaca... )
Daimler’s political sensitivity to the Chinese market was underscored this month when the company came under fire for posting an inspirational quote from the Dalai Lama on its Instagram account.
Within days Daimler had issued two formal apologies, including a letter from executives saying that Daimler “deeply regrets the hurt and grief that its negligent and insensitive mistake has caused to the Chinese people”.
M
We are already dependent on them for components , almost everything you purchase these days is made in China and now they are starting to sell their cars here, at knock down prices.
We were even dependent on them for PPE during Covid! Which came from where?
What do we think will happen when they have put all their competitors out of business? They will buy up the companies at fire sale prices , gain financial control of what remains of our industry and then they will start to influence government policy. Employee protection and health and safety will go out of the window. World domination without firing a shot!
If you want your great grand children to be working in sweatshops for a bowl of rice, carry on buying their stuff and letting them buy up everything. Otherwise, close the door.
Make no mistake, the money to invest ultimately comes from the state itself and Chinese state interference follows.
From 2018 Financial times article. ( https://www.ft.com/content/a9fcd724-1bbc-11e8-aaca... )
Daimler’s political sensitivity to the Chinese market was underscored this month when the company came under fire for posting an inspirational quote from the Dalai Lama on its Instagram account.
Within days Daimler had issued two formal apologies, including a letter from executives saying that Daimler “deeply regrets the hurt and grief that its negligent and insensitive mistake has caused to the Chinese people”.
I'm not sure how the Chinese state has money to invest like this. Given what is happening in China right now with it's economy (Yes the media are ignoring it).
When the banks are refusing people there own money and mass protests on the streets (hence the Covid outbreak to lock everyone down in their Tower blocks) you know not all is well.
And no, I'm not a conspiracy theorist, a good friend is currently living there and seeing it with her own eyes.
We are already dependent on them for components , almost everything you purchase these days is made in China and now they are starting to sell their cars here, at knock down prices.
We were even dependent on them for PPE during Covid! Which came from where?
What do we think will happen when they have put all their competitors out of business? They will buy up the companies at fire sale prices , gain financial control of what remains of our industry and then they will start to influence government policy. Employee protection and health and safety will go out of the window. World domination without firing a shot!
If you want your great grand children to be working in sweatshops for a bowl of rice, carry on buying their stuff and letting them buy up everything. Otherwise, close the door.
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