The Daily Telegraph

Aston Martin sells shares at deep discount to raise funds

- By Howard Mustoe

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.

 ?? ?? Aston Martin, the carmaker behind the DBS Coupe, is raising £576m in new equity to pay down expensive debt and invest in new production lines for battery-powered models
Aston Martin, the carmaker behind the DBS Coupe, is raising £576m in new equity to pay down expensive debt and invest in new production lines for battery-powered models

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