AML - Stock Market Listing
Discussion
Jon39 said:
Beckson said:
Going public in hindsight could be the moment and decision that doomed AML as an independent company.
Maybe LS was a bit delusional in what he thought could actually be achieved.
How much more can it slide before action is taken?
Does it drop down another 30-40% market cap before the muck hits the fan?
Maybe LS was a bit delusional in what he thought could actually be achieved.
How much more can it slide before action is taken?
Does it drop down another 30-40% market cap before the muck hits the fan?
I might have misunderstood your comment about LS, Beckson, but he was not involved in AML obtaining a public listing.
InvestIndustrial being a private equity business, works on shorter-term investment timescales. They wanted to sell their holding in AML and often the way for a seller to obtain the highest price, is through an Initial Public Offering.
Lots of good news, numerous new model announcements and a modest annual (one off as it turned out) profit, created great 'turnaround' excitement amongst City institutions (yum, yum) and also investors, who probably (love James Bond) cannot even explain fundamentals, resulting in a huge flotation valuation of £4·3 billion.
Result, everyone happy (although after a while, not the new retail shareholders).
..........................
Purely a guess, but the 'muck hits fan' point probably depends more on how long the working capital lasts, rather than market cap. Think the cash flow looks OK for this year.
Does LS now need AML to keep going ?
If his own F1 team had to change their name back to (say) Racing Point, then goodbye to all his lucrative recent sponsors and the AML annual fee.
SpeckledJim said:
Could LS buy the rights to the 'Aston Martin Racing' name (from himself) and keep it for his F1 team after whatever happens to AML next?
Is LS actually wealthy enough? Apparently he’s worth $2.9bn - which is usually over valued and includes things such as yachts and car collections. I know it’s a lot of money - but we’re talking about a company in massive decline. I remember the adage - “How do you make a small fortune out of motor racing? Start with a large one.”
Petrus1983 said:
SpeckledJim said:
Could LS buy the rights to the 'Aston Martin Racing' name (from himself) and keep it for his F1 team after whatever happens to AML next?
Is LS actually wealthy enough? Apparently he’s worth $2.9bn - which is usually over valued and includes things such as yachts and car collections. I know it’s a lot of money - but we’re talking about a company in massive decline. I remember the adage - “How do you make a small fortune out of motor racing? Start with a large one.”
SpeckledJim said:
Could LS buy the rights to the 'Aston Martin Racing' name (from himself) and keep it for his F1 team after whatever happens to AML next?
Just me talking aloud, so could be very wrong.
AML value must be market value plus debt ie. £600m plus debt about £1,000 million = £1.6 billion.
Presumably someone could buy the business now for that amount, plus a premium to sell the deal.
The LS consortium own (is it) about 23%, so they would need to pay 77% of the total value.
That would indeed secure the Aston Martin name for his F1 business, but if the AML road car business ceased trading, what good would the name be then ? Very famous, but history.
To keep the road car business running would require all the future annual losses to be funded.
Many times previously, when the going got tough, a noble saviour with deep pockets appeared.
Each time though, it proved temporary (even for Ford), so potential buyers now, facing much bigger financial numbers than ever before, might be cautious about taking on such an uncertain commitment.
Any ideas ?
Jon39 said:
Just me talking aloud, so could be very wrong.
AML value must be market value plus debt ie. £600m plus debt about £1,000 million = £1.6 billion.
Presumably someone could buy the business now for that amount, plus a premium to sell the deal.
The LS consortium own (is it) about 23%, so they would need to pay 77% of the total value.
That would indeed secure the Aston Martin name for his F1 business, but if the AML road car business ceased trading, what good would the name be then ? Very famous, but history.
To keep the road car business running would require all the future annual losses to be funded.
Many times previously, when the going got tough, a noble saviour with deep pockets appeared.
Each time though, it proved temporary (even for Ford), so potential buyers now, facing much bigger financial numbers than ever before, might be cautious about taking on such an uncertain commitment.
Any ideas ?
Petrus1983 said:
Kodak is very famous historically.
Murray Walker could have fun, if he was still with us.
"And it's Go, Go, Go.
The Kodak Williams F1 team have had a mighty start and are in the lead.
It is pit stop time. The Kodak team are first in. Oh dear, they have removed the wheels and sent them off for processing.
They will be history again very soon.
Yes, the Red Bull are a digital team and have had a 2.6 second pit stop. They have easily taken the lead away from Kodak."
No, I don't think using a defunct team name could work very well.
Plenty of F1 teams have became defunct through racing, but I cannot think of one which continued on using the original title.
Jon - I'm not sure that I follow your valuation of AML. It might 'cost' £1.6bn to buy AML on the market and clear the debt, but surely that is not the value of the company. Would the value not be Market Capitalisation (if we are being optimistic) less Debt leaving -£400m? The premises may be held against the debt but I would seriously doubt that they are worth £1bn.
Furthermore the value of the company would be seriously prejudiced or even eliminated if it were separated from brand rights and IP. VW were when they bought Crewe and then, apparently, discovered that the purchase did not include the rights to the RR brand, which BMW promptly bought. Surely no-one would be making that blunder again, even if it were feasible for LS to attempt to appropriate the brand, 'Aston Martin', 'Lagonda', 'AMR', 'Vantage', 'Vanquish', 'Valkyrie', 'Vulcan', 'Q Branch' and all the rest of it. If that occurred and came out, surely the share value would collapse even further, and legal action would have to be on the cards.
I so wish I had qualified as an accountant!
Furthermore the value of the company would be seriously prejudiced or even eliminated if it were separated from brand rights and IP. VW were when they bought Crewe and then, apparently, discovered that the purchase did not include the rights to the RR brand, which BMW promptly bought. Surely no-one would be making that blunder again, even if it were feasible for LS to attempt to appropriate the brand, 'Aston Martin', 'Lagonda', 'AMR', 'Vantage', 'Vanquish', 'Valkyrie', 'Vulcan', 'Q Branch' and all the rest of it. If that occurred and came out, surely the share value would collapse even further, and legal action would have to be on the cards.
I so wish I had qualified as an accountant!
Interesting discussion as always!
I think a lot depends on who the bondholders are...
I have repeatedly asked, or at least if Stroll is one of them, at the AGM (by email) etc, and been completely ignored.
My guess would be Merc and Stroll. This is where the real power and profit comes from.
I can’t see Stroll NOT being a bondholder, as he might have only a little of his own personal cash in AML equity.
It’s about to get really interesting though, because I doubt the current cash balance will last until the debt needs renegotiated in late 2024/25.
Another guess is Stroll didn’t do enough due diligence, didn’t know about Nebula agreement etc, so completely underestimated the task in hand, then Covid, and current environment hit hard.
Stroll needs to be in charge of AML.L to use/abuse the name for raising funds at AMR.
Interesting question if LS can buy the rights to the name from himself though, hmmmmm, unsure.
So either, they scrape through on the cash they have, DBX saves them until the debt is rolled over at a higher rate, eeeeck. (Not likely imho)
Cash raise/dillution or someone like Aramco buying in to reduce debt with cash.
Bankuptcy and bondholders get everything on the cheap, the amount they have made at 10.5-15% interest will probably cover the costs already.
I need to read up on what LS and Merc have in place to stop takeover attempts etc.
Merc have a board seat, so have veto options. Stroll has something in place to stop hostile takeovers, can't remember exactly what that is though.
I think a lot depends on who the bondholders are...
I have repeatedly asked, or at least if Stroll is one of them, at the AGM (by email) etc, and been completely ignored.
My guess would be Merc and Stroll. This is where the real power and profit comes from.
I can’t see Stroll NOT being a bondholder, as he might have only a little of his own personal cash in AML equity.
It’s about to get really interesting though, because I doubt the current cash balance will last until the debt needs renegotiated in late 2024/25.
Another guess is Stroll didn’t do enough due diligence, didn’t know about Nebula agreement etc, so completely underestimated the task in hand, then Covid, and current environment hit hard.
Stroll needs to be in charge of AML.L to use/abuse the name for raising funds at AMR.
Interesting question if LS can buy the rights to the name from himself though, hmmmmm, unsure.
So either, they scrape through on the cash they have, DBX saves them until the debt is rolled over at a higher rate, eeeeck. (Not likely imho)
Cash raise/dillution or someone like Aramco buying in to reduce debt with cash.
Bankuptcy and bondholders get everything on the cheap, the amount they have made at 10.5-15% interest will probably cover the costs already.
I need to read up on what LS and Merc have in place to stop takeover attempts etc.
Merc have a board seat, so have veto options. Stroll has something in place to stop hostile takeovers, can't remember exactly what that is though.
Edited by Peavey123 on Wednesday 15th June 18:21
cardigankid said:
Jon - I'm not sure that I follow your valuation of AML. It might 'cost' £1.6bn to buy AML on the market and clear the debt, but surely that is not the value of the company. Would the value not be Market Capitalisation (if we are being optimistic) less Debt leaving -£400m? The premises may be held against the debt but I would seriously doubt that they are worth £1bn. ..
Thanks Dieter.
When not sure, I always begin the post with a comment such as might be wrong, as in this case.
I have got in a muddle with this before.
My line of thought was;
If someone was theoretically able now, to buy all the shares, it would cost about £600 million.
Having spent that money and bought the Company, they have an asset, which still owes about £1 billion to banks and bond holders.
If the new owner decided to clear that debt, they would have to hand over a further £1billion.
Where am l going wrong ?
My son is a chartered accountant. He passed every exam at the first attempt. It is a great ticket, if needing to change jobs. My joke is, the family brains must have skipped a generation. I get by through life though. -
Over to you.
Peavey123 said:
Interesting discussion as always!
I think a lot depends on who the bondholders are...
I have repeatedly asked, or at least if Stroll is one of them, at the AGM (by email) etc, and been completely ignored. ....
I think a lot depends on who the bondholders are...
I have repeatedly asked, or at least if Stroll is one of them, at the AGM (by email) etc, and been completely ignored. ....
They only answer the questions they want to at AGMs.
Directors have to state their ownership of ordinary shares and ordinary share options, but I have never seen director declarations about bonds, so do you think perhaps it is a private matter ?
Normally when corporate bonds are issued, they are offered to broker clients, or sometimes available to retail investors.
If so in the case of AML, could there therefore be hundreds of bondholders ?
They are traded as well, so changes of ownership too.
What do you think about this point ?
P.S. The Mercedes-Benz restriction is in the Technical Agreement.
Something along the lines of change of ownership and parts supply could stop.
Bit awkward, when all the cars are designed to take M-B engines and electrical parts.
Production would stop for yonks.
Edited by Jon39 on Wednesday 15th June 19:28
Jon39 said:
cardigankid said:
Jon - I'm not sure that I follow your valuation of AML. It might 'cost' £1.6bn to buy AML on the market and clear the debt, but surely that is not the value of the company. Would the value not be Market Capitalisation (if we are being optimistic) less Debt leaving -£400m? The premises may be held against the debt but I would seriously doubt that they are worth £1bn. ..
Thanks Dieter.
When not sure, I always begin the post with a comment such as might be wrong, as in this case.
I have got in a muddle with this before.
My line of thought was;
If someone was theoretically able now, to buy all the shares, it would cost about £600 million.
Having spent that money and bought the Company, they have an asset, which still owes about £1 billion to banks and bond holders.
If the new owner decided to clear that debt, they would have to hand over a further £1billion.
Where am l going wrong ?
My son is a chartered accountant. He passed every exam at the first attempt. It is a great ticket, if needing to change jobs. My joke is, the family brains must have skipped a generation. I get by through life though. -
Over to you.
It reminds me of the BMW loan/dowry to Rover/mg as part of the deal. A friend at the time told me Rover would be bankrupt by a date in the future. He was 90 days out in the end - BMW had set the dowry/loan to provide enough runway in a business they knew was haemorrhaging cash to try and clean their hands after the disposal and limit brand damage in the UK.
I suspect MB, - if they buy it, will buy the brand, IP and maybe the Welsh factory from the remnants.
I don't think it's unreasonable to ask, when equity holders are getting wiped out and bondholders are raking it in, and the debt is the biggest danger to the future of the company, Imho it was wreckless, and/or planned to line certain pockets.
The bond refinancing was not open to retail either, AFAIK.
Change of ownership only happens if people sell their holdings.
I guess now the DBX is even more important than it ever was.
If it undersells, well.....
They only answer the questions they want to at AGMs.
Directors have to state their ownership of ordinary shares and ordinary share options, but I have never seen director declarations about bonds, so do you think perhaps it is a private matter ?
Normally when corporate bonds are issued, they are offered to broker clients, or sometimes available to retail investors.
If so in the case of AML, could there therefore be hundreds of bondholders ?
They are traded as well, so changes of ownership too.
What do you think about this point ?
P.S. The Mercedes-Benz restriction is in the Technical Agreement.
Something along the lines of change of ownership and parts supply could stop.
Bit awkward, when all the cars are designed to take M-B engines and electrical parts.
Production would stop for yonks.
The bond refinancing was not open to retail either, AFAIK.
Change of ownership only happens if people sell their holdings.
I guess now the DBX is even more important than it ever was.
If it undersells, well.....
Jon39 said:
They only answer the questions they want to at AGMs.
Directors have to state their ownership of ordinary shares and ordinary share options, but I have never seen director declarations about bonds, so do you think perhaps it is a private matter ?
Normally when corporate bonds are issued, they are offered to broker clients, or sometimes available to retail investors.
If so in the case of AML, could there therefore be hundreds of bondholders ?
They are traded as well, so changes of ownership too.
What do you think about this point ?
P.S. The Mercedes-Benz restriction is in the Technical Agreement.
Something along the lines of change of ownership and parts supply could stop.
Bit awkward, when all the cars are designed to take M-B engines and electrical parts.
Production would stop for yonks.
Edited by Jon39 on Wednesday 15th June 19:28
Peavey123 said:
I don't think it's unreasonable to ask, when equity holders are getting wiped out and bondholders are raking it in, and the debt is the biggest danger to the future of the company, Imho it was wreckless, and/or planned to line certain pockets. ...
Did you know that bonds were being used by AML, before the Stroll era ?
During the very successful Ford era, when Ford did not interfere at all, except to provided money and engineering guidance, there was no debt at all. Even with record sales and no debt though, if Ford had not been paying car development costs, it would still have been loss making. That says it all. In 2004, some dealers were even refusing to take more orders, for the hugely popular Vantage !
Excellent sales, no debt, but still no pre-tax profit !
When the Richards consortium purchased AML from Ford, that is when bonds were first issued (several hundred million Pounds).
The money involved is more now though, as are the coupon rates. Bigger risk of course.
Peavey123 said:
and the debt is the biggest danger to the future of the company, Imho it was wreckless, and/or planned to line certain pockets.
It's a fairly standard concept. It's called ""Loan to Own".Personally, I think Stroll is one gigantic BS artist, and I can't wait to see him separated from Aston. If I have to listen to him on one more conference call, I am going to puke. ( Not a shareholder, just like to listen to the calls...must be out of my mind!)
Jon39 said:
Oh dear.
Some significant number change moves today.
Share Price ......... Now under £6.
Market Value ...... Now under £700 million.
Loss since IPO ... Now over 97%.
I only posted those numbers 3 days ago.
The share price has passed through another round Pound level this morning.
Share Price ......... Now under £5 .........................(Current live price 486.50p)
Market Value ...... Now under £600 million.
Loss since IPO ... Now 98%.
Jon39 said:
Thanks Dieter.
When not sure, I always begin the post with a comment such as might be wrong, as in this case.
I have got in a muddle with this before.
My line of thought was;
If someone was theoretically able now, to buy all the shares, it would cost about £600 million.
Having spent that money and bought the Company, they have an asset, which still owes about £1 billion to banks and bond holders.
If the new owner decided to clear that debt, they would have to hand over a further £1billion.
Where am l going wrong ?
My son is a chartered accountant. He passed every exam at the first attempt. It is a great ticket, if needing to change jobs. My joke is, the family brains must have skipped a generation. I get by through life though. -
Over to you.
Jon39 said:
Jon39 said:
Oh dear.
Some significant number change moves today.
Share Price ......... Now under £6.
Market Value ...... Now under £700 million.
Loss since IPO ... Now over 97%.
I only posted those numbers 3 days ago.
The share price has passed through another round Pound level this morning.
Share Price ......... Now under £5 .........................(Current live price 486.50p)
Market Value ...... Now under £600 million.
Loss since IPO ... Now 98%.
If it had dropped 98%, market cap would now be £100M
There has been a share split post-IPO
I mean it's still catastrophic, but it's not 98%
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