Aston Martin seeks to raise £152m to bolster finances
Aston Martin today said it will ask investors to snap up £152m of new shares to help it become roadworthy once more amid sinking sales and the coronavirus pandemic.
Britain’s luxury car manufacturer said the equity raise, planned for the end of June, would be equivalent to around 20 per cent of its existing issued share capital. It will look to sell about 304m shares at 50p each.
New owner Yew Tree will pick up 25 per cent of the offering. Prestige Motors, which has steadily cut its holding in the company from its previous status as the main shareholder, will buy around eight per cent.
The pricing represents an 8.1 per cent discount on Aston Martin’s share price when the issue was agreed.
Aston Martin’s shares sank by 18.3 per cent today, down to 50.9p. Investors sold the stock down on the equity raise. But they also reacted to Aston Martin revealing second quarter retail sales and wholesales will fall first quarter levels due to the pandemic.
David Madden, analyst at CMC Markets, said that was “understandable” amid the coronavirus outbreak.
And the British firm said now 90 per cent of its dealer network has reopened, with testing and development resuming for its hybrid sports car, the Valkyrie.
The luxury car maker also revealed it has received £20m from the government’s Coronavirus Large Business Interruption Loan Scheme (CBILS) to keep it on track.
And the FTSE-listed company also said it would draw down around $68m (£54.8m) in debt due to be paid back in 2022 at a 12 per cent interest rate.
Aston Martin’s new billionaire owner Lawrence Stroll said discussions are underway to secure up to £50m in extra trade financing. That would bolster the company’s existing inventory financing arrangements, which totalled £39.7m at the end of March.
It should also shore up its cash position of £240m.
“In recent months the company has undergone a turnaround programme as new capital has been injected and cuts to costs have been made too,” Madden added. “Today the group reiterated the point that cost efficiency has been improved.”
Stroll has made sweeping changes since buying James Bond’s favourite car brand in January.
Former CEO Andy Palmer was ousted in May in favour of bringing in Mercedes boss Tobias Moers from August.
And on Monday Aston Martin named ex Jaguar Land Rover chief financial officer Kenneth Gregor as its new CFO.
Today Stroll said the new leadership would be “focused on cost and investment control consistent with restoring profitability”.
“Our energies and those of the whole Aston Martin team will be focused on building a stronger business for our customers, our employees, our strategic and other partners and our shareholders and enabling Aston Martin to return to being one of the preeminent luxury car brands in the world,” Stroll added.