The British manufacturer has been unable to generate the cash needed to invest in new models and electric technology, and has also struggled with delays to its Valkyrie supercar and its newest DBX 707 sports car. Saudi Arabia’s Public Investment Fund (PIF), led by Crown Prince Mohammed bin Salman, will buy £78m worth of shares and take part in a £575m rights issue that will make it the second-largest investor after Yew Tree , of the consortium. by billionaire fashion tycoon Laurence Stroll who took over Aston Martin in early 2020 as it neared bankruptcy. Aston Martin shares hit a record low of under 355 on Friday after the deal was announced, before recovering some of this week’s losses to jump 20% to 445. Its market value had fallen from £1.6bn at the start of the year to just £432m on Thursday night, amid persistent concerns from investors about its financial health. Bin Salman, the de facto leader of Saudi Arabia, is chairman of the PIF. He has been accused by US intelligence agencies of killing Washington Post journalist Jamal Khashoggi in 2018. The killing shocked the international community and caused a crisis in diplomatic relations for the kingdom. When asked about the suitability of the Saudi Arabian regime to invest in a UK public company, Stroll, who serves as executive chairman, insisted he was “very comfortable” bringing the PIF to life, citing investments he holds in other companies “blue-chip”. and automakers such as electric startup Lucid and rival British sports car company McLaren. The fundraising will represent another attempt by Aston Martin to put itself on a solid footing after years of struggling as a FTSE 250-listed company. In May, Stroll appointed former Ferrari boss Amedeo Felisa as its third chief executive in three years to try to revive its image as a manufacturer of exclusive sports cars, favored by James Bond in the spy movie franchise. The carmaker will use up to half of the new capital to pay down debt, which is costing it £130m a year in interest. The remaining capital will give the automaker a “significant liquidity cushion to support and accelerate future capital spending” amid what it described as a “challenging operating environment, impacted by the war in Ukraine, the Covid-19 lockdowns in China , as well as ongoing supply chain and logistics disruptions.” Sales in the first half of the year fell 8% compared to 2021 to 2,676 because of the problems, but he said he expected things to pick up in the second half of the year. Yew Tree’s stake will be reduced from 22% to 18.3% and PIF will be entitled to two seats on Aston Martin’s board. Existing shareholder Mercedes-Benz will also invest £56 million. The carmaker also rejected a much larger £1.3bn investment offered by a consortium of Chinese carmaker Geely, which also owns Britain’s Lotus, Sweden’s Volvo and former Aston Martin owner InvestIndustrial, which has been criticized by former Aston Martin CEO Andy; Palmer for not allowing the automaker to raise cash in its disastrous 2018 IPO. Stroll criticized the offer as a “camouflaged, disguised acquisition … on the cheap” that would provide far more money than the company needed. Geely did not offer to help with electric car technology as part of the deal, he said. Subscribe to the Business Today daily email or follow Guardian Business on Twitter @BusinessDesk Stroll did not rule out working with other companies in the PIF portfolio as it prepares to launch its first all-electric car by 2025, but said the fundraising was mainly necessary to address “legacy issues”. “I inherited a business that was in serious trouble and needed to be completely restructured,” Stroll said, adding that while the deal would remove a “significant surplus” from the business, it had been held back by tough loan terms agreed in November 2020. “My only regret is the punitive terms of this financing,” he told reporters. “We’ve had to live with that funding ever since.”
