Aston Martin announces £500million rescue deal

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CASH-STRAPPED luxury car manufacturer Aston Martin has announced major plans to raise a substantial emergency sum of funds worth £500million.

A consortium led by Canadian billionaire Lawrence Stroll will invest £182million into the struggling carmaker, with the rest of the money coming from current investors.

As part of the rescue deal, the Racing Point Formula One team, which is partly owned by Mr Stroll, will be branded Aston Martin from 2021 for at least ten seasons.

The move comes after Gaydon-based Aston Martin said they had experienced “challenging trading conditions” in 2019, with the underperformance of the company prompting a financial review of the business.

Mr Stroll’s consortium will take a 20 per cent stake in the firm, with the 60-year-old joining the board and becoming its executive chairman.

Because of this, Penny Hughes has confirmed she will step down as director once the rescue deal is complete.

She said: “The difficult trading performance in 2019 resulted in severe pressure on liquidity which has left the company with no alternative but to seek substantial additional equity financing.

“Without this, the balance sheet is not robust enough to support the operations of the group.

“Notwithstanding recent weak trading, the strength of the Aston Martin brand and our expanding portfolio of cars has allowed us to attract a strong new partner in Mr Stroll to support the turnaround of the business.”

Mr Stroll’s consortium has agreed to provide £55million of short-term working capital and Aston Martin will pay that money back once the share placement is complete, the firm said in a statement today, Friday.

The emergency cash injection means the manufacturer, which is synonymous with the James Bond franchise, will no longer need to draw down $100million of high-interest debt.

“I am very pleased that I, and my partners in the consortium, have reached an agreement with the board and major shareholders to make this significant long-term investment,” said Mr Stroll, who has invested in high-end clothing brands Tommy Hilfiger and Ralph Lauren.

“Our investment underpins the company’s financial security and ensures it will be operating from a position of financial strength.

“On completion of the £500million of fundraising, I look forward to working with the board and management team in Aston Martin Lagonda to review and improve each aspect of the company’s operations and marketing; to continue to invest in the development of new models and technologies, and to start to rebalance production to prioritise demand over supply.

“I, and my partners, firmly believe that Aston Martin is one of the great global luxury car brands. I believe that this combination of capital and my experience of both the motor industry and building highly successful global brands will mean that, over time, we fulfil Aston Martin Lagonda’s potential,” he added.

As part of the deal, Aston Martin has announced it will pushback its investment into electric vehicles from 2022 to 2025.

Instead, the company will now focus its attentions on a V6 hybrid engine to help reduce the carbon emissions from its cars.

Aston Martin chief executive Andy Palmer added: “We are focused on turning around performance, restoring price positioning and delivering a more efficient operational footprint.

“The actions announced will allow us to implement and deliver on our reset plan and provide Aston Martin Lagonda with a sustainable platform for the future.”