Saudis rescue cash-strapped Aston Martin
Saudi arabia’s sovereign wealth fund will become the second-biggest shareholder in aston Martin as part of a £653m fundraising by the James Bond car maker announced yesterday.
The kingdom’s Public investment Fund (PiF), controlled by Crown Prince Mohammed bin Salman – and best known in the uK for its controversial takeover of Newcastle united football club – will invest an initial £78m to take a 16.7pc stake.
it is also taking part in a rights issue for existing shareholders to raise the rest of the money needed to shore up company finances. aston Martin said it would use the funds to pay off debt and bolster its cash war chest as it faces a ‘challenging operating environment’ – pointing to war in ukraine, lockdowns in China and supply chain disruption.
The takeover of Newcastle last year was mired in controversy because of Saudi arabia’s human rights record and the murder of uS-based Saudi journalist Jamal Khashoggi in 2018.
Other major PiF investments have included uber and SoftBank, the Japanese conglomerate well known for backing tech start-ups.
it has more than half a trillion dollars worth of assets, and has a stake in British supercar manufacturer and F1 team owner McLaren Group – part of a £550m fundraising a year ago.
aston Martin also has an F1 team. One of its drivers, Lance Stroll, is the son of the company’s chairman, Lawrence.
The PiF, together with chairman Stroll’s Yew Tree Consortium and Mercedes-Benz, will invest £335m under aston Martin’s plan announced yesterday.
Stroll’s stake will be reduced to 18.3pc and Mercedes-Benz’s holding to 9.7pc. aston Martin also disclosed that it had rejected a proposal involving investindustrial, which took the brand to the stock market in 2018, and Chinese car maker Geely which would have raised £1.3bn.
it said the latter offer ‘markedly overestimated’ the capital it needed and would have heavily diluted investors’ holdings.
Stroll said he was ‘delighted’ to welcome the Saudi fund as an ‘anchor’ shareholder.
‘This is a game-changing event for aston Martin, supporting the delivery of our strategic plans and accelerating our long-term growth potential,’ he said. Shares rose 23.7pc, or 88p, to 459.3p.
in a trading update, aston Martin revealed that while demand for its luxury vehicles remained strong, supply chain and logistics disruption had hit deliveries in the first half of the year, which were lower than in 2021.
its cash balance was affected by spending to unblock the disruptions and currency movements, which have seen the uS dollar surge, were likely to have an impact on its dollar-denominated debt, which stood at £957m according to most-recently published figures this year.
aston Martin is due to report half-year results in two weeks’ time. The company, founded in 2013, is best known for featuring in the James Bond franchise.
it first went public on the London stock market four years ago but shares are now worth only a fraction of their 1900p value at the time of the float, and were down 73pc for the year to date before yesterday.
its market value of £435m compares to £4.3bn when it floated.