Aston Martin shares plummet, future at risk

Formula 1 team owner Lawrence Stroll has forcefully renegotiated his January bailout deal with Aston Martin, bumping his consortium’s ownership stake from 20 to 25 per cent.

The Racing Point owner and father of driver Lance Stroll today put Aston’s feet to the fire to compensate for its plummeting share price, with Aston Martin management asking Stroll’s consortium to boost its stake from £182 million (in a £500 million re-organisation) to £218 million.

"In light of recent extraordinary equity market volatility related to concerns over Covid-19, the company has renegotiated certain terms relating to the proposed investment," the company said in a statement today.

It’s a mark of Aston Martin’s financial woes since floating with a price of £19 a share and a market capitalization of £4.33 billion. The price for a quarter of Aston Martin has fallen from £1.8 billion to just £218 million, with a 90 per cent share price collapse.

Aston Martin’s share price has tumbled since its floatation, despite a small bump when the original deal with Stroll’s Yew Tree company was announced. The share price has even halved since Stroll’s consortium agreed to its original bailout at the end of January.

Yew Tree has also agreed to top up its working capital to £75 million to keep the lights on at Aston until Stroll, a textiles billionaire, becomes its Executive Chairman.

Aston Martin has recently axed its Le Mans 24 Hour race program for the Valkyrie it developed with Cosworth and Red Bull Racing, nominally to concentrate on Formula 1. It is Stroll’s plan to rebrand Racing Point (which was Force India) as Aston Martin from next season.

Aston Martin has been bankrupt seven times in its 105-year history.

Internally, it has become overstretched developing the DBX SUV (which it claims it has 4000 orders for) and the Ferrari- and Porsche-matching Valhalla hybrid sports car at the same time.

It has canned the four-door Rapide electric car on the grounds of cost and its plan to spin off Lagonda as an all-electric ultra-luxury brand has been kyboshed due to lack of funds as well.