Even with sell out successes like the V12 Vantage and bold new derivatives like the DBX707, financial peril never seems far away when discussing Aston Martin. Accordingly, it has today announced a huge new investment, drawing in money most notably from Saudi Arabia’s Public Investment Fund, plus existing investors Mercedes-Benz and the Yew Tree Consortium, owned by Executive Chairman Lawrence Stroll. More shares will be issued, too.
The aim is a proposed equity capital raise of £653m, which will be “used to meaningfully de-leverage the balance sheet, strengthen and accelerate long-term growth”. There’s a lot to do; updates for the existing range, due in 2023, can’t come soon enough, a plug-in is due for 2024 (which seems a long way off given the Ferrari 296 GTB and McLaren Artura already exist) and the first all-electric Aston is set for 2025. All while de-leveraging that balance sheet - or dealing with debt, as you and I might know it, which is approaching £1bn. Up to half the investment may go on that, in fact. Aston’s projections signal £335m of the money coming from Mercedes, the Yew Tree Consortium and the PIF. There’s also an “underwritten rights issue” in the plan to raise approximately £575m.
Stroll said of the news: "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. Since I became Executive Chairman in 2020, we have made significant progress on our journey to become the world's most desirable, ultra-luxury British performance brand.
The Saudi funding is arguably of most interest, because it means the PIF is set to become a 16.7 per cent stakeholder in Aston with two non-executive director seats on the board as well. The reshuffle will see Yew Tree’s share set at 18.3 per cent, and Mercedes’ at 9.7 per cent. An agreement with JP Morgan and Barclays sees them “underwrite on a standby basis the Rights Issue up to £318m”, which doesn’t include the shares that’ll be taken up by Merc, Yew Tree and the PIF. An offer from a group called the Atlas Consortium - led by Geely and Morgan owners InvestIndustrial - was worth £1.3bn but rejected by the board.
Lots of money in prospect, then, but lots to do as well. It seems likely now given the urgency that the Aston EV will use Mercedes architecture. The Valhalla will use the AMG V8 and a pair of electric motors, with its 2024 launch date looming. And there are Valkyries to finish up building. Which does look a little daunting, though demand for the cars remains high. The GTs and sports cars, even before their facelifts, are sold out for 2023; orders for the DBX are 40 per cent higher than this time last year as well. Despite the world being as it is right now, Aston quotes wholesale volumes for the first half of 2022 as 2,676 cars, against 2,901 for the same time in 2021.
“I am delighted to welcome the Public Investment Fund as a new anchor shareholder in the Company, alongside my consortium,” continued Stroll. “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.” He went on to describe the fresh wave of capital as a “game changing event” for the brand, now set on “the right strategy to fully realise the long-term potential of Aston Martin.” With ex-Ferrari man Amedeo Felisa having assumed the CEO role from Tobias Moers, Stroll seems confident that the right people are in place to complement the renewed investment. Time will tell if success and stability follow.
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