Aston Martin completes new £560m funding deal

New rights issue brings around £560 million of investment; Lawrence Stroll becomes executive chairman

Aston Martin’s financial troubles have been eased by the completion of a new rights issue giving the company an immediate cash injection.

Additional funding, said to be in the region of £560 million pounds, gives the company enough cash to push on with production of its crucial DBX SUV when the new factory in St Athan in South Wales is able to open. Roughly half of the £560 million is expected to come from Stroll’s ‘Yew Tree’ consortium with the rest from the rights issue. A further credit line of £150 million is also reported to have been made available to the company.

Aston Martin also recently received investments from Mercedes F1 boss, Toto Wolff and Switzerland's richest man, Ernesto Bertarelli. However the pair will see their respective 4.8% and 3.5% stakes in the company diluted to less than 1% by the latest rights issue.

As part of the new rights issue deal, Canadian businessman and owner of the Racing Point F1 Team Lawrence Stroll, who has invested substantially himself, replaces Penny Hughes as Executive Chairman. Dr Andy Palmer remains as company CEO.

In a statement, Stroll said “I am truly excited to be taking on the role of Executive Chairman of this great British company, Aston Martin Lagonda.  In the midst of the most challenging environment, globally, that any of us have ever experienced, all of my and the management team’s energies will now be dedicated to building on the inherent strengths of the Company, its Brand, engineering, and the skills of its people to forge the foundations of a bright future.

“Our ambition for the Company is significant, clear and only matched by our determination to succeed.  The rights issue and the investment that I, and my co-investors in the consortium, have made has underpinned the financial security of, and our confidence in, the business. We can now focus on the engineering and marketing programmes that will enable Aston Martin to become one of the preeminent luxury car brands in the world.

“In this first year we will reset the business.  Our most pressing objective is to plan to restart our manufacturing operations, particularly to start production of the brand’s first SUV, DBX, and to bring the organisation back to full operating life. We will do this in a way that ensures we will protect our people, wherever they work – their safety is our overwhelming concern.  Alongside the return to production, we will be undertaking the necessary rebalancing of supply to demand for our core models. In the months ahead, as the world starts to emerge from the Covid-19 pandemic, we will start to reinvigorate our marketing initiatives to continue to build our order book."  

Formula One team and new technology

Stroll also confirmed plans to rebrand his Racing Point team as Aston Martin in next year’s F1 world championship, saying, “In 2021, Aston Martin will take its place on the Formula 1 grid as a highly competitive works team for the first time in over 60 years. This will give us a significant global marketing platform to strengthen our Brand and engage with our customers and partners across the world."

He also promised that development will push on with the recently-revealed V6 engine together with the Valhalla and Vanquish mid-engined cars that it will feature in. “We will continue to focus significant effort and investment into the continued development of our range of mid-engined cars,” he said. “These are a crucial next stage in the expansion of our product line-up.

“Descended from the awesome Aston Martin Valkyrie hypercar, the Valhalla and Vanquish are set to position Aston Martin firmly in this sector and complete our range of highly engineered and beautiful sports cars.” 

Although Andy Palmer had previously said that Aston’s plans for fully electric Lagonda models had been pushed back to 2025, Stroll confirmed that electric power is still very much on the agenda. “In the longer term we intend to commit to producing electric cars to combine performance and luxury with environmental sustainability.

“There is a hugely exciting opportunity for Aston Martin, and an enormous amount of hard work to be done to achieve our ambitions.  I have spent the past few weeks getting to know the business and new colleagues. I have been impressed with their passion, dedication and craftsmanship in making our beautiful cars. I am also impressed by and hugely appreciative of the significant efforts being made by everyone at Aston Martin Lagonda to support the business as we manage through this uncertain time, including our proud contribution to supporting the NHS through the development and manufacture of much needed personal protective equipment (PPE). 

“I am confident that collectively we have the skills, the brand, the product and the financial strength to achieve those ambitions over time.  When we do, we will have built Aston Martin into the highly valued company that it should be, and in which our customers, staff, partners and shareholders will share with pride.”

Auto Express understands that the St Athan plant shut at the end of March with production of the first DBX models literally days away. The first cars were due to be delivered to customers in May and June following a planned international launch in the USA in April.

It’s expected that limited production could start at St Athan as soon as lockdown restrictions are lifted, although social distancing measures would still be in place.

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