Aston Martin raises $1.1b to stay afloat

Aston Martin shares leapt by 20 per cent in value on Friday following the announcement that Saudi Arabia's Public Investment Fund (PIF) had taken a 17 per cent stake in the struggling British car-maker.

PIF’s big investment is said to be part of an enormous £653 million ($A1.14b) cash injection that will enable the 109-year-old sports car brand to slash its towering debt to enable it to invest in new models.

From now on PIF will own a 16.7 per cent stake in Aston Martin – less than the 18.3 per cent share currently owned by chairman Lawrence Stroll's Yew Tree consortium.

Mercedes-Benz has also agreed to up is shareholding in Aston to around 9.7 per cent.

It's been reported that – thanks to PIF, which also owns a large share of Lucid Motors – Aston Martin could form a new technical alliance with Lucid, which could include platform and powertrain sharing, on top of the arrangement it already has with Mercedes-Benz.

The latest financial restructuring will apparently save Aston Martin from bankruptcy for the eighth time in its history and help secure its long-term future.

Half of the money received from the new investment is said to repay the company’s existing £957 million ($A1.67b) debt.

“In 2020, I inherited a business in deep trouble that needed to be reset,” Stroll told news outlets.

Since then COVID-related lockdowns and supply chain disruptions have worsened Aston Martin’s precarious debt position.

Now the famous British brand says it expects to start becoming profitable again from 2024 (previously 2023).

At the same time, Aston Martin reported lower than expected sales in the first half of 2022 – at 2676 vehicles – but said it is still aiming to produce 6600 cars this year in total.

Interestingly, it wasn't just PIF that was lining up to plough money into Aston Martin.

Investindustrial, the former Italian investment group that once owned Aston, and car-making giant Geely were both also keen, expressing an interest to channel an incredible £1.3b ($A2.3b) into the firm, but the pair’s offer was ultimately rejected over fears it was a takeover by stealth.

Aston Martin said the proposal was “an attempt by the Atlas Consortium [Geely and Investindustrial] to acquire a controlling and prospectively majority ownership position without any premium paid to existing shareholders”.

The pair would have injected £203 million for fresh equity, making them the largest shareholder but below the 30 per cent threshold at which they would be forced to launch a formal takeover.

Stroll told the Financial Times the fundraising was important to “deal with the god-damned debt” and stressed the business “did not need to raise money to execute the business plan”.

Back in April Aston Martin launched its new Racing Green strategy, which mapped out its journey to electrification and promised its core line-up of grand tourers, sports cars, supercars and SUVs would be fully electrified by 2030.

Before Aston launches its first electric sports car in 2025, it will release its final V12 Vantage and the $5 million Valkyrie hypercar (both this year), followed by the Valhalla mid-engined supercar and the new DB12 (both 2024).

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