Aston Martin's "fundamental reset" of its business continues with the news today that, along with £20m from the Coronavirus Large Business Interruption Loan Scheme, it will also embark on a non-pre-emptive equity raise.
Basically, it's more new shares - up to 20 per cent of its existing equity capital - in an attempt to raise sufficient funds to see out the coronavirus downturn. Some of Aston's strategies "to realise its full potential and operate as a true luxury company" are already in place, with dealer stock reduced to rebalance supply and demand, DBX production having commenced and more than 90 per cent of the dealer network now open again. But with net debt as of 31st May 2020 approaching £900m, more drastic measures are apparently required. Alongside the share offering, discussions remain ongoing to secure up to £50m of trade financing "in addition to inventory financing arrangements currently in place."
Still, new Executive Chairman Lawrence Stroll remains optimistic. In a statement he said: "After a couple of months in the business, I am as enthusiastic and confident in our multi-year plan to build on the inherent strengths of Aston Martin, its unique Brand defined by beautiful design, engineering and the skills of its people to forge the foundations of a bright future as I ever was." He goes on to say that development of the mid-engined cars is continuing, with Valkyrie testing back underway (and deliveries due next year) and there are updates for the core sports cars to follow - alongside the Aston Martin F1 team, too. Stroll described the latest measures as there to "improve financial flexibility in a period of ongoing uncertainty with this additional funding to execute the business plan."
As well as the sports cars, the trading statement pointed to expansion of the DBX range, too. It suggests that capital expenditure and R&D investment will be focused on "sports car mid-cycle refreshes", "mid-engine development" and "DBX variant" - which we'd hazard a guess at referring to a hybrid derivative, though nothing is confirmed as yet. It feels like Aston's SUV takes on more importance to the brand with each week that passes. The interim results for the six months to June 30th, 2020 are due on July 29th - three days before new boss Tobias Moers officially takes over.
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