AML - Stock Market Listing
Discussion
RL17 said:
Aston Martin Lagonda Global Holdings plc is just a company - it's not even 18 months old! It could also be wound up or liquidated in a few months after a sale or a reorganisation.
Daimler mentioned just as a hypothetical example to demonstrate the the car business (incl brand) can be separated from the debt. Just like a car company that pays a £100m dividend (company value will go down £100m and business value unchanged).
Majority of large companies, FTSE100 etc have loads of different businesses and majority of business sales, rather than company sales.
Point is that AML business worth twice as much as AMLGHplc and
Debt and companies can be reorganised and usually there's a separate group company that issues the debt/bonds (Aston Martin Capital Holdings Limited I believe). So there's probably a company with the car business (in AMLGHplc group) that's worth £2bn that could be sold (company sale) for that (hypothetically of course) or that company could sell the AML business. (as part of the deal the buyer gets the AML name/names etc and seller renames all it's remaining companies with dull name company names).
Brands can be separated also - would have expected/expect Ford companies in UK (when they actually made cars) or Europe which clearly had a car business or two (European market cars) to have made cars under license from Ford US (and so had a car business without owning the brand).
So AML car business worth £2bn and AML cars is not the same as AMLGHplc.
Yes, thanks, I get that. I have seen the hospitality industry where a guy who started and ran a hotel has now split the business into the the property, the hotel brand and the hotel management company. To my simple mind that is now three operations trying to extract a living from essentially the one business, but fine if they can do it, and obviously it allows them to sell off the hotel brand and the management company for a big lump sum while still retaining the property and collecting the rent. What happens when the music stops and the whole house of cards collapses? In the simpler case a professional firm's owner retires but retains the property and rents it to the partners who have bought him out of the business. They are loaded with debt and rent commitments, a downturn comes along and they just go bust. Equally I appreciate that BMW bought the badge rights and built Rolls-Royce Motor Cars Limited extremely successfully around that. I suspect however they knew what they were doing and took care to protect themselves, so no-one else is likely to come along selling Rolls-Royce perfumes, kettles, vacuum cleaners or condoms. Daimler mentioned just as a hypothetical example to demonstrate the the car business (incl brand) can be separated from the debt. Just like a car company that pays a £100m dividend (company value will go down £100m and business value unchanged).
Majority of large companies, FTSE100 etc have loads of different businesses and majority of business sales, rather than company sales.
Point is that AML business worth twice as much as AMLGHplc and
Debt and companies can be reorganised and usually there's a separate group company that issues the debt/bonds (Aston Martin Capital Holdings Limited I believe). So there's probably a company with the car business (in AMLGHplc group) that's worth £2bn that could be sold (company sale) for that (hypothetically of course) or that company could sell the AML business. (as part of the deal the buyer gets the AML name/names etc and seller renames all it's remaining companies with dull name company names).
Brands can be separated also - would have expected/expect Ford companies in UK (when they actually made cars) or Europe which clearly had a car business or two (European market cars) to have made cars under license from Ford US (and so had a car business without owning the brand).
So AML car business worth £2bn and AML cars is not the same as AMLGHplc.
I understand the mechanics. What I question is the value of trying to turn Aston Martin (AMLGH Ltd) into a brand company while selling off the car company to someone like Daimler. Firstly, the nature of the Aston Martin brand, like Boeing I suggested, is so intrinsically involved with the vehicular product that it cannot be exploited extensively separately. Secondly, I can't see Daimler being naive enough to take the car company without controlling the brand. They don't need to pay £2bn for a loss-making sports car company, they already own AMG, and chances are that AML will just fall into their lap if they sit it out. And a very good thing too, because then the available money would be used to fund product, rather than swell the pockets of asset strippers.
Then I am asking, if AMLGH Ltd doesn't own the car company or the brand, what is it and what is it worth? Nada, I'm guessing.
I would agree with the poster who suggested that AML have managed to alienate, if not their employees, then certainly their customers. Apart from the overspending, what do their employees think when they see AP ripping off the company for his own gain? And as a potential customer, I don't want to encourage, be associated with or help fund that sort of cynical behaviour.
Just been shocked to see a TV ad for a Vantage - short shot of one roaring around a twisty valley with a shouty offer - “just $1699 a month - $0 down”. It’s run many times tonight prime time CNBC station here in NE USA. Gosh. Seems they still have a few to move. Surprised if this is part of the brand strategy.
Exitleft said:
Just been shocked to see a TV ad for a Vantage - short shot of one roaring around a twisty valley with a shouty offer - “just $1699 a month - $0 down”. It’s run many times tonight prime time CNBC station here in NE USA. Gosh. Seems they still have a few to move. Surprised if this is part of the brand strategy.
Ironically, immediately to the right of your own contribution was this advert.
A click on that reveals £795 a month.
However, the deposit does not match the December UK offer. It is £24,303.
At the top of the page, is a DB11 advert. Click there and the headline shown is '£995 PER MONTH'.
Edited by Jon39 on Saturday 25th January 09:06
cardigankid said:
Maybe I missed your point in my keenness to read what I expected to see. Could they really separate the debt from the car company? If you're lending 100 million, do you not take some security over whatever assets there are, or is that naive?
Agree on lots of points. The car business (with the AM and AML and AMR and L brand names for use in the car business) is where all the value is. Not suggesting at all that brand should be separate from group running the AML car business.See little value in other uses of AML names - good to have a bit of extra income but not going to turn AML into a LVMH type company.
AML car business (incl brands) still worth twice that of AMLGHplc and a reduction by say a £300 to 400m discounted rights issue is the best way now with some early bond redemptions (and talk of other investors can string out a bit of time to get that sorted).
Most investors put money into any business, with an expectation of growth, increasing income, or hopefully both.
Media reports of Mr Stroll putting £200 million in to AML, for approx 20% stake, confuses me.
Even with a board seat, majority control would still be in the hands of the existing main shareholders.
Various scenarios have appeared in the press, mostly involving Formula One, none of which I would have thought would result in creating a fortune for AML. History has shown that most entrants in motor sport are very enthusiastic, but often become sucked in to spending vast sums. Bernie Ecclestone said how many F1 teams had gone bust, since the beginning.
Is there an obvious attraction, for Mr Stroll to simply hold a minority equity stake in AML, which I have not visualised ?
After all, cash is expected to still be going out faster than coming in, for some time.
If the 20% were to be newly issued shares, then there would be dilution for the present shareholders.
Edited by Jon39 on Saturday 25th January 21:19
RL17 said:
cardigankid said:
Maybe I missed your point in my keenness to read what I expected to see. Could they really separate the debt from the car company? If you're lending 100 million, do you not take some security over whatever assets there are, or is that naive?
Agree on lots of points. The car business (with the AM and AML and AMR and L brand names for use in the car business) is where all the value is. Not suggesting at all that brand should be separate from group running the AML car business.See little value in other uses of AML names - good to have a bit of extra income but not going to turn AML into a LVMH type company.
AML car business (incl brands) still worth twice that of AMLGHplc and a reduction by say a £300 to 400m discounted rights issue is the best way now with some early bond redemptions (and talk of other investors can string out a bit of time to get that sorted).
Jon39 said:
...... Is there an obvious attraction, for Mr Stroll to simply hold a minority equity stake in AML, which I have not visualised ?
After all, cash is expected to still be going out faster than coming in, for some time.
I have thought of one possible scenario.
Mr Stroll 20%, plus existing major shareholders, equals take the Company private.
( Funny if that were to happen. We would be back to the first post of this topic. )
Probably something like this from the Offering Memorandom:
On or after April 15, 2019, the Issuer may redeem at
its option all or a portion of the Dollar Notes at the
applicable redemption prices set forth under the
caption “Description of the Notes—Optional
Redemption—Optional Redemption of the Dollar
Notes” plus accrued and unpaid interest and
additional amounts, if any, to the redemption date.
On or after April 15, 2019, the Issuer may redeem at
its option all or a portion of the Dollar Notes at the
applicable redemption prices set forth under the
caption “Description of the Notes—Optional
Redemption—Optional Redemption of the Dollar
Notes” plus accrued and unpaid interest and
additional amounts, if any, to the redemption date.
RL17 said:
Probably something like this from the Offering Memorandom:
On or after April 15, 2019, the Issuer may redeem at
its option all or a portion of the Dollar Notes at the
applicable redemption prices set forth under the
caption “Description of the Notes—Optional
Redemption—Optional Redemption of the Dollar
Notes” plus accrued and unpaid interest and
additional amounts, if any, to the redemption date.
I see you’ve left out the prices which are at a premium to which the bind investors bought the notes of approximately 5%. So you’re advocating Aston does a massively discounted rights issue/sells off the brand to then turn round to bond investors to give them a profit on their bond holdings when they are currently massively offside ? On or after April 15, 2019, the Issuer may redeem at
its option all or a portion of the Dollar Notes at the
applicable redemption prices set forth under the
caption “Description of the Notes—Optional
Redemption—Optional Redemption of the Dollar
Notes” plus accrued and unpaid interest and
additional amounts, if any, to the redemption date.
This diskussion about taking bondholders out is nonsense. The bond holders only come into play if the equity is in danger of being viped out. Then in effect they control the company. If somebody is so stupid as to wanting to buy the bond holders out at a premium then they should start buying the bonds cheaper in the market. The bond price will always move in the market according to the credit rating outlook of the underlying asset. That doesn’t change the fact, that at maturity the Creditor will have to pay back the nominal amount. The bond holders will only accept a discount once the asset base has deteriorated to such an extend that their initial outlay is in danger and not before. Given the high interest with which the bonds were issued and the short duration, the provider clearly knew what he was in fore. Speculating that he would take a discount because of the deteriorating outlook is nonsense.
Edited by hornbaek on Tuesday 28th January 11:19
Cheib said:
RL17 said:
Probably something like this from the Offering Memorandom:
On or after April 15, 2019, the Issuer may redeem at
its option all or a portion of the Dollar Notes at the
applicable redemption prices set forth under the
caption “Description of the Notes—Optional
Redemption—Optional Redemption of the Dollar
Notes” plus accrued and unpaid interest and
additional amounts, if any, to the redemption date.
I see you’ve left out the prices which are at a premium to which the bind investors bought the notes of approximately 5%. So you’re advocating Aston does a massively discounted rights issue/sells off the brand to then turn round to bond investors to give them a profit on their bond holdings when they are currently massively offside ? On or after April 15, 2019, the Issuer may redeem at
its option all or a portion of the Dollar Notes at the
applicable redemption prices set forth under the
caption “Description of the Notes—Optional
Redemption—Optional Redemption of the Dollar
Notes” plus accrued and unpaid interest and
additional amounts, if any, to the redemption date.
So
Debt too high - yes
Equity too low - yes
More equity in - yes from me
Interest on debt 5.5% up to 12% pa or possibly more rates - going out for a few years - drag on cash flow, profits and future profits and EPS etc etc
So if you do get a large lump of equity in now what would you do with it? (as can't spend it all at once on R&D and do need to reduce debt). Hopefully not a Nationwide savings or premium bonds.
Never advocated selling the brand. Appears some people don't know what a hypothetical example is, or the difference between a company and a business. Hope they read the small print in business better than this thread 
Maybe bondholders hoping to take over company or just the worse for AML.
If all (most) shareholders undertook a discounted equity issue with funds going to shore up company it would not be dilutive. Doing the impossible
and repaying some debt early then wouldn't be the worst course of action.
If balance sheet is improved then why keep paying 12% interest pa.
Keeps AML in AMLGHplc and keeps AMs (not so concerned about Ls) coming out of the factories.
Maybe bondholders hoping to take over company or just the worse for AML.If all (most) shareholders undertook a discounted equity issue with funds going to shore up company it would not be dilutive. Doing the impossible
and repaying some debt early then wouldn't be the worst course of action.If balance sheet is improved then why keep paying 12% interest pa.
Keeps AML in AMLGHplc and keeps AMs (not so concerned about Ls) coming out of the factories.
Would anyone be interested in the list of bonds?
Although issued at different times, they all seem to be due for repayment on the same day, 15th April 2022.
Perhaps there is a beneficial reason for that, but it looks a bit eggs in one basket. Might that be a big risk ? The economic climate could change at an awkward time.
Bonds were used to buy the Company from Ford, but those were repaid in 2017, one year early and refinanced at a lower rate of interest. 9.25% down to 5.75% on GBP bonds, 6.5% on the $ bonds. An ongoing servicing cost reduction.
Hopefully the whole lot won't be refinanced next time at a high interest rate. Think of the servicing cost !
RL17 said:
Cheib said:
RL17 said:
Probably something like this from the Offering Memorandom:
On or after April 15, 2019, the Issuer may redeem at
its option all or a portion of the Dollar Notes at the
applicable redemption prices set forth under the
caption “Description of the Notes—Optional
Redemption—Optional Redemption of the Dollar
Notes” plus accrued and unpaid interest and
additional amounts, if any, to the redemption date.
I see you’ve left out the prices which are at a premium to which the bind investors bought the notes of approximately 5%. So you’re advocating Aston does a massively discounted rights issue/sells off the brand to then turn round to bond investors to give them a profit on their bond holdings when they are currently massively offside ? On or after April 15, 2019, the Issuer may redeem at
its option all or a portion of the Dollar Notes at the
applicable redemption prices set forth under the
caption “Description of the Notes—Optional
Redemption—Optional Redemption of the Dollar
Notes” plus accrued and unpaid interest and
additional amounts, if any, to the redemption date.
So
Debt too high - yes
Equity too low - yes
More equity in - yes from me
Interest on debt 5.5% up to 12% pa or possibly more rates - going out for a few years - drag on cash flow, profits and future profits and EPS etc etc
So if you do get a large lump of equity in now what would you do with it? (as can't spend it all at once on R&D and do need to reduce debt). Hopefully not a Nationwide savings or premium bonds.
Jon39 said:
Would anyone be interested in the list of bonds?
Although issued at different times, they all seem to be due for repayment on the same day, 15th April 2022.
Perhaps there is a beneficial reason for that, but it looks a bit eggs in one basket. Might that be a big risk ? The economic climate could change at an awkward time.
Bonds were used to buy the Company from Ford, but those were repaid in 2017, one year early and refinanced at a lower rate of interest. 9.25% down to 5.75% on GBP bonds, 6.5% on the $ bonds. An ongoing servicing cost reduction.
Hopefully the whole lot won't be refinanced next time at a high interest rate. Think of the servicing cost !
It put the bond holders in an extraordinarily strong position because it’s almost impossible to believe Aston can repay all the the debt so they either need to come out with some incredibly attractive terms to bond holders to extend the maturity or there’s a a huge problem.
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