Billionaire to increase investment and take larger stake in British firm after shares plummet
James Attwood, digital editor
13 March 2020

The investment fund headed by billionaire Lawrence Stroll has reworked its planned investment in Aston Martin – taking a bigger slice of the company as a result.

While other car firms also suffered, the British company’s share price has been especially badly hit by market uncertainty sparked by the coronavirus pandemic. At one point earlier this week shares were listed at under £2 each.

In January, Stroll’s investment fund had agreed to take a 16.7% stake in Aston Martin for £182 million, at a price of £4 per share. The deal, first reported by Autocar, also included a £318 million cash infusion through a new rights issue, for a total of £500 million.

Given Aston’s dramatically reduced share price, Stroll and his fellow investors have radically reworked the agreement. The revised deal will be worth a total capital raise of £536 million, with Stroll’s investment fund, named Yew Tree, taking a larger 25% stake in the company at a value of £2.25 per share. Yew Tree will also provide £75.5 million in “short-term working capital support” to ensure Aston has the liquidity it needs to meet the revised investment timetable. That is an increase in £20 million from original plans.

The annual general meeting scheduled for 16 March has been postponed, with voting to approve the new deal to be conducted by proxy.

Stroll said: “There has been a significant change in the global market environment in which Aston Martin Lagonda operates. What has not changed is our commitment to provide the Company with the necessary funding it needs to manage through this period, to reset the business and to deliver on its long-term potential.

“Following recent moves in the share price and discussions with the Board, I and my consortium of investors, have agreed that we will now acquire 25% of the company and take up our rights in full in return for a long-term capital Investment of £262 million.  In addition, we have agreed to advance a further £20 million in short term funding to support the company, bringing this total amount to £75.5 million.  Whilst the immediate outlook looks increasingly challenging, I remain fully committed to the future of Aston Martin Lagonda and look forward to implementing our plans once the fundraising is complete."

While announcing the deal, Aston Martin Lagonda said that it was “proactively” managing its supply chain and business during the spread of the Covid-19 virus. It says it has put public health measures in place to protect its staff.

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The firm also said that despite some parts supply disruption from China “there has been no impact on production to date”, with supply secured “until at least early April”.

Aston did note that Covid-19 has impacted customer demand in China and Asia, adding it “has the potential to do the same in other markets.”

Aston boss Andy Palmer said: “We are actively managing the potential impacts of Covid-19 on a daily basis, most particularly in our tier 2 supply chain, with no disruption to production to date and are mindful of the ongoing uncertainties and risks to the business.

“The first two months of the year were planned to be our smallest in wholesale unit terms, as we start to rebalance supply and demand; a key component of our plan to turn around performance and restore our price positioning. Trading has generally been in line with these conservative expectations, with retail performance slightly better than planned.”

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Comments
6

13 March 2020

 The Aston Stroller......parents will know.

14 March 2020

Their shares have tanked, and do not blame Coronavirus for this as they were tanking earlier.

 

At one point this week they were worth a tenth of their original IPO price of £19.   Valuing Aston at less than £500 million, down from £4.3bn.

 

No CEO has ever survived this massacre of their share values but Andy Palmer is still there.   This is dotcom bad.

 

And ask Aston fans and they will agree.   The car are not as beautiful as they once was.   Marek s designs just are not working.   Yet Aston and Palmer will not do what is necessary.   Fire Reichman.

 

Lawrence Stroll has even bought in to Palmer s failed plans.   Why?   I have no answer on this.

 

14 March 2020

eejit

13 March 2020

So unless I've got it wrong. A additional £36m gets you a 8.3% of the company.

Aston are in more trouble than is reported if they are signing up to that.....

14 March 2020
Maj1c wrote:

So unless I've got it wrong. A additional £36m gets you a 8.3% of the company.

Aston are in more trouble than is reported if they are signing up to that.....

It has more to do with when they original made the offer the shares were above £4 per share, now they are hovering above £2.   And sometimes dropping below that.

 

Just for the same value of investment they can now get more of the company.   If anything they seem to have shifted some of the investment to a loan, and reduced how much they're spending overall.

 

 

14 March 2020
Aston screwed-up badly, by not going with Geely.

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