Aston Martin claims it now has the funding to last at least the next 12 months as part of a new investment into the company that will also result in it entering a works Formula 1 team in 2021.
In a series of announcements this evening (30 March), Aston Martin has now formally confirmed that Racing Point F1 team owner Lawrence Stroll will take over as executive chairman on 20 April. A rights issue has raised £536 million and a further £150m will be made available to the company.
That investment will allow Aston to put the DBX SUV into production imminently after the new St Athan facility returns to operation after its Covid-19-enforced shutdown last week, subject to any delays in the production chain. The first customer deliveries are planned this summer, should the supply chain function as anticipated.
The next 12 months is considered significant for Aston, because the DBX is seen as make-or-break for the company's future. Make a success of it and it will become the firm's biggest-selling model with likely the largest profit margins. Failure would put the very future of the company at risk, given the huge investment needed to realise not just the car but also the St Athan factory in which it will be built.
But while confirming the deal, Aston Martin Lagonda Ltd warned in a statement: "Taking into account the proceeds of the capital raise, the Company is of the opinion that the Group does not have sufficient working capital to meet its requirements for 12 months following the publication of the Original Prospectus."
Since the prospectus including details of Stroll's investment was published, the global pandemic has heavily impacted Aston. The firm said the resulting uncertainty raises questions over its future financial position - and makes the success of the DBX even more critical.
The investment from Stroll's so-called Yew Tree consortium stands at a total of £262 million, £171m of which has come today as part of the rights issue. The balance has come from existing company shareholders.
Aston's share price has been in freefall ever since its stock market launch at £19 per share towards the end of 2018. It fell another 18% today to finish at £2.26 per share before this deal was announced. It has tonight said that it would not have the funds to meet the 12 months of investment needed in its previous financial plan announced on 13 March due to the dramatic impact Covid-19 is having on its business.
Stroll, who replaces outgoing chair Penny Hughes, gave little detail on the plans to enter F1 as a works team, but it's expected to be a renaming of his Racing Point squad. Aston's title sponsorship of Red Bull Racing ends this year, although the two remain committed to bringing the co-developed Valkyrie hypercar into production this year.