As if Aston Martin didn’t have enough to do – reduce debt, stoke demand, launch a mid-engined supercar, make money, that sort of thing – it finds itself edging towards court cases that threaten to further derail its standing, whatever the rights and wrongs.
It’s hard to pick through the claims and counterclaims, but at the heart of the arguments is a complex deal between Aston and a Swiss group, Nebula Project AG, to fund its headline-grabbing plans of 2016 to create a mid-engined family, spearheaded by the Valkyrie hypercar, which seems to be a headache for the firm at every step, from the car’s painful path to development and delivery through to this latest litigation.
Loosely, cash-strapped Aston, then seeking to float and run by Andy Palmer, needed a way to fund its ambitious projects and so did a deal with Nebula, a long-time associate of the firm, to put up some of the development funds in exchange for paying it royalties on future sales for a decade. Flotation and a near-death experience followed – and, now, under Lawrence Stroll’s leadership, the deal has broken down to the point that Aston has filed a civil case against Nebula and criminal proceedings against its owners.
Last year, Aston claimed against Nebula for around £15 million for the nonpayment of deposits that it had collected for Valkyrie sales, which Aston alleges it failed to hand over. Then, just weeks ago, Nebula co-owners Andreas Baenziger and Florian Kamelger formally began proceedings against Aston, highlighting their successful 11-year working relationship with the firm and seeking £150m in damages for the alleged breach of the agreement, describing its claims against them as “illegitimate and unjustified”.
Nebula also indicated that it is prepared to work with Aston again if it keeps its commitments, but Stroll, who had long known what was coming and who has long been bullish about his chances of having his day in court, doesn’t appear to be remotely interested. With the court cases live, he has to choose his words carefully, saying: “We are confident in our legal position and believe their counterclaims are retaliatory and without merit.”
This really matters to Aston, because even after its recent fund-raising round – which has diminished Aston’s value to the point that one share is now worth about 2.5% of its launch valuation in 2018 – Aston’s finances remain precarious, its reduced debt burden still significant enough to be a millstone and its cashflow in the spotlight.
Whether it wins or loses, there’s a reputational impact of being in court and a £150m swing – while unlikely to be devastating, and in theory the risk of which is built into the share price already – would cause a serious wobble. Rumours of predators waiting to swoop on Aston rarely go away, now inevitably led by Geely following its recent stake purchase – and now they are ramping up again.
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