Aston's bond holders are told talks regarding a deal are underway; reports suggest Mahindra & Mahindra is favourite to land £250m deal for 40 per cent of the company
Jim Holder
29 November 2012

Aston Martin has confirmed that it is in advanced talks with investors for an equity injection.

A document sent to bond holders in the firm today reported: "Aston Martin, with the support of its shareholders, confirms that discussions are at an advanced stage to secure a capital increase which will ensure it can deliver its medium and long-term growth plans."

Both Indian conglomerate Mahindra & Mahindra and Italian buyout firm Invest Industrial are reported to be vying to invest in Aston, with the former offering a significantly greater cash injection and the latter offering less financial support but a technical partnership with Mercedes and AMG.

Initial reports suggested that Invest Industrial were favourites to secure the £250m deal, but sources now suggest that Mahindra & Mahindra has moved ahead in negotiations and is the favoured partner. The winning bidder is expect to own 40% of the company and have 50% of the voting rights.

Financial analysts are reporting that the admission to bond holders that talks are underway signals that a deal is likely to be imminent, and could be concluded within a week.

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Comments
8

29 November 2012

both Investindustrial and Mahindra & Mahindra could become shareholders in Aston Martin.

 

Owner of company seeks additional investment, nothing to panic over and not unusual is it?

29 November 2012

devil's advocate wrote:

both Investindustrial and Mahindra & Mahindra could become shareholders in Aston Martin.

 

Owner of company seeks additional investment, nothing to panic over and not unusual is it?

Not really, but the current owners are an investment company with I think a small percentage retained by Ford.

So really at the very least these are people looking for medium term returns.

29 November 2012

How much cash is Dr Bez actually going to get to invest in new models, or are the old owners just keeping it all?

30 November 2012

The problem is that it is simply uneconomic to make 4500 cars per annum and that Aston needs to be part of a bigger manufacturer. You simply can't develop the electronics economically by yourself let alone the chassis, hence the fact that every new model since 2003 has basically been a DB9 (squashed, stretched or lightened). Ferrari are doing well now because they can establish a technological lead over their rivals and make the cars economically as part of a bigger group. Lamborghini and Porsche are the same.

The other problem is that they need to be allied with someone to get the average fuel consumption of their range down. We don't want to see any more Cygnets.

This is heretical I know, but they need to be bought by Toyota or Honda who have the engineering track record (and quality control) to get this moving. Mahindra lack the engineering expertise (unlike Tata).

The worst thing that could happen to Aston now is that they raise some money from a group of financial investors and/or Mahindra so the current torpor just drags on....

 

30 November 2012

i think its a prestige thing for Mahindra. Offer Aston Martins as a flagship to its range of cars. I don't think Aston Martin would be able to provide massive return on investment

twitter @anikadamali, @notPCnairobi

21 February 2013

I guess that the TATA purchase of Land Rover did not really have any adverse effect as you can see from their car mats and other stuff. I doubt that Mahindra would want aston martin to lose its sheen as a prestige brand also

22 February 2013

This was a big news last year in the auto industry, with the investment injection would mean a large chunk of the car manufacturer’s company share, and even have equal voting rights.  My friends and I were even betting on which firm would emerge as the winner in the bid, and were quite sure that the India firm would win, but we were proven wrong. In more recent news, it seems that Mahindra & Mahindra pulled out of the car manufacturer’s bid, when the Italian buyout firm confirms stake buy. It was a complete turnaround, when at first Mahindra & Mahindra firm seems to have the edge. But there were no technical partnerships for Aston Martin with Damier AG’s Mercedes, as earlier speculated.

Thomas Williams: http://www.carid.com

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