Aston Martin is seeking to raise funds to safeguard its future, Autocar has learned, wanting to significantly strengthen its financial position as it ramps up investment for its next-generation platforms and future electrification strategy.
The move comes as a result of Aston Martin’s ongoing struggles to balance its books as it juggles its cash reserves and income from sales against development costs of new vehicles and debt repayments.
The British company has £1.2 billion of outstanding bonds, bank drafts and loans on its books, meaning it's unlikely to be able to raise funds by taking on more debt, especially given the level of repayments currently required to service it.
As a result of its precarious position, its share price has recently been running at a historic low, although there's no suggestion that its roster of owners – including executive chairman Lawrence Stroll, a multi-billionaire – would let the company fold.
A statement issued by the company in response to reports on the subject said: "Aston Martin Lagonda (the "Company") notes recent movements in its share price and media speculation regarding prospective fundraising efforts.
"The Company continues to trade in line with expectations for full year 2022 and reaffirms its financial guidance for full year 2022, subject to movements in FX rates, as provided at first quarter results on 4 May 2022.
"Order books are robust and have strengthened further in recent months, with sports cars sold out into 2023 and order intake for DBX more than 40% higher than the previous year. In addition, Aston Martin Valkyrie production continues to pick up pace. The Company is delighted with the customer and market reaction to new model derivatives and its recently enhanced management team are increasingly focussed on new model launches from 2023 onwards.
"As noted at the full year 2022 results on 23 February 2022 and annual general meeting on 25 May 2022, the Company regularly keeps its funding options under review. Any funding option, if explored and executed, would be to support and accelerate the Company's future growth."
Autocar understands that the fundraising could include bringing a significant new investor in, potentially offering a position on the company’s board as an inducement for a holding that insiders suggest could be valued at upwards of £200 million.
Autocar sources suggest that there are two leading contenders for the funding. One is linked to a Saudi Arabian investment fund, with Stroll having strong links to the country via the Aston Martin Formula 1 team’s title sponsorship with oil giant Aramco; and the other is linked to an investment fund based on the west coast of the US.
While Aston Martin’s road car and motorsport businesses are separate entities, it's possible that the investment could cover both operations. A spokesman for the F1 team declined to comment, but a previous filing in Aston Martin Racing's financial statements revealed Aramco has an option to subscribe to 10% of the shares in the company.
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Aston Martin will continue to be in trouble until they sack Marek Reichman. Continuing to rely upon his designs which clearly aren't selling in sufficient numbers is their problem.
Other companies would have. They'd find a new designer to relaunch their cars with. But time and time again they let Reichman design another destined for disappointment.
"sports cars sold out into 2023 and order intake for DBX more than 40% higher than the previous year" - neither him nor sales figures appear to be the problem
russ13b,
it's best to have a look at Karenable (with the usual internet address at the end) and his analysis of the Q1 results and the discussions on number from there. He struggled to figure out exactly what those claims of sold out and, at the time, 60% higher DBX sales.
Two key points are that it looks that Aston is stopping selling the older models hence why they can claim they're sold out. Secondly that sales of DBX were down 44%, so a 60% increase really only takes it back to where it was, which was about 3k per year and not the 6k they were targetting.
However, as I say, it's difficult to actually find solid numbers from Stroll on production, sales, and what is wholesale to dealers.
Stroll quote from the last earnings call: “Let me be crystal clear, black and white: we do not need money." Hence, I would not put to much stock in the sales projections.