Aston Martin had to suffer the indignity of seeing its shares trade at just £1.73 each by the end of Monday, down from £4.80 at close of play on Friday, after it released new stock as part of a previously announced bid to raise £654 million and steer itself away from its latest financial disaster.
The new price reflects the dilution of existing shares but highlights just how low the company has fallen after it first listed on the stock market in a blaze of optimism back in 2019, when its shares were listed at £19 apiece.
The initial public offering (IPO) valued the company at more than £4 billion, but after a brutal three years that have included two substantial changes in ownership, the company’s market capitalisation has fallen to just over £500 million.
The new share issue includes a £78m cash injection from Saudi Arabia’s sovereign wealth fund, the PIF, that instantly gives it a 16.7% stake in Aston Martin and two board seats.
The Saudis' stake is the second largest after that of company chairman Lawrence Stroll. The billionaire's Yew Tree Overseas Investment Fund drops to 14.2% ownership, while Mercedes-Benz’s stake is diluted to 9.7%.
The newly raised money will used in two ways. “Up to half” of will be used to repay existing debt, which as of the end of June stood at a whopping £1.28bn, while deposits from customers totalled £93m, Aston Martin said in its share prospectus. Paying down some of its debt alone will save it £30m annually, it said.
Aston Martin’s debt mountain was listed under the risks laid out to potential buyers of the new share issue, with the company admitting it “placed the Group at a competitive disadvantage as compared to its competitors, to the extent that they are not as highly leveraged".
The rest will be used to “maintain a substantial liquidity cushion” as Aston Martin spends to overhaul its ageing sports car line-up against various global headwinds.
Aston Martin’s core front-engined sports car line-up, although frequently added to with low-volume specials (most recently the V12 Vantage Roadster), is getting long in the tooth. The DB11, the first of the three to be replaced in the previous incarnation of the company, run by ex-Nissan executive Andy Palmer, was first unveiled back in 2016.
Aston Martin has promised that the DB11, Vantage and DBS will all be revamped next year, “offering substantially new styling and electrical architecture”, according to the share prospectus.
Beyond that, Aston Martin has promised the mid-engined Valhalla plug-in hybrid supercar for launch in 2024 and its first EV in 2025 on an electric platform that will eventually be used for the majority of its cars.
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