Aston Martin is reportedly looking to raise funds to safeguard its future, wanting to significantly strengthen its financial position as it ramps up investment for its next-generation platforms and future electrification strategy.
According to Autocar, the move comes as a result of the company’s ongoing struggles to balance its books as it juggles its cash reserves and income from sales against development costs of new vehicles and debt repayments.
Aston Martin has £1.2bn of outstanding bonds, bank drafts and loans on its books, Autocar said, meaning it’s unlikely to be able to raise funds by taking on more debt, especially given the level of repayments currently required to service it.
It was understood the fundraising could include bringing in a significant new investor, potentially offering a position on the company’s board as an inducement for a holding that could be valued at more than £200m.
Autocar sources suggested there are two leading contenders for the funding. One is linked to a Saudi Arabian investment fund, with executive chairman Lawrence Stroll having strong links to the country via the Aston Martin Formula 1 team’s title sponsorship with oil giant Aramco. The other is linked to an investment fund based on the US west coast.
While Aston Martin’s road car and motorsport businesses are separate entities, it’s possible that the investment could cover both operations, Autocar said.
No timeline was given for when talks could be concluded, beyond suggesting that there’s significant pressure to complete them as soon as possible to safeguard Aston Martin’s near-term outlook.
At 0920 BST, the shares were down 9% at 436.60p.
Russ Mould, investment director at AJ Bell, said: “The company has been a disastrous investment since joining the stock market and anyone looking to back the company now would no doubt want a great deal to compensate for the risks involved.”
Jefferies said: “Details are vague and the company has not commented. Considering closing market value c. £550m, such an investment could significantly affect ownership including control by Yew Consortium (c.21%).”
It added that upcoming second-quarter results “are unlikely to reassure about liquidity”.
