The Daily Telegraph
Aston Martin sells shares at deep discount to raise funds
ASTON Martin is selling shares at a 78pc discount as part of a Saudi-backed fundraising to patch up its balance sheet and repair the business.
Shares in the luxury car marque tumbled after Aston Martin said it would sell the rights to new shares at a deep discount, part of a plan to repay expensive debts.
Aston Martin plans to raise £576m selling new shares at 103p each, well below Friday’s closing price of 484.7p. The discount is unusually large for a rights issue and the company’s stock dropped 13pc on the news.
The rights issue is part of an effort announced in July to raise £653m, which includes a first time investment from Saudi Arabia’s Public Investment Fund. Mercedes-benz is also backing Aston Martin in the fundraising, as is the company’s largest shareholder and chairman Lawrence Stroll.
Shareholders who do not participate in the rights issue face being diluted, with four new shares issued for every one in circulation. The new cash will be used to pay down some of Aston Martin’s priciest debt. The company raised $150m in 2019, paying 12pc at a time when borrowing rates were at historic lows.
Funds will also be put towards new production lines for new battery-powered cars. Aston Martin said paying down the debt and investing in electric vehicle capacity should help it generate free cash by 2024. The company made a pre-tax loss of £285m in the first six months of this year.