Canadian billionaire takes 16.7% stake in Aston Martin

Aston Martin St Athan facility

A Canadian billionaire, is taking a 16.7% stake in Aston Martin Lagonda.

It is thought that Lawrence Stroll, who owns a Formula 1 team, beat another interested party, the Chinese automotive company Geely, which controls Sweden’s Volvo, Britain’s Lotus Cars, The London Electric Vehicle Company in Coventry and holds a stake in Daimler, which had reported been interested in a deal.

Yew Tree Overseas Limited (“Yew Tree”), a vehicle controlled by Lawrence Stroll, has also agreed to provide £55.5m of short-term working capital support. According to Autocar Magazine, the consortium led by Stroll, will buy 45.6 million new ordinary shares in Aston Martin Lagonda, at a price of £4 per share. The consortium also includes Lord Anthony Bamford (Chairman of JCB), André Desmarais (Former CEO of Power Corp. Canada), Michael de Picciotto (Vice-Chairman of the Supervisory Board of Engel & Volkërs AG), Silas Chou (the Hong Kong fashion sector investor), John Idol (Chairman and CEO of Capri Holdings) and John McCaw (former part owner of McCaw Cellular).

The release of 45.6m new ordinary shares at a price of £4.00 per share to the consortium will raise £182 million, representing 16.7 % of the company.

 The Consortium has indicated its intention to seek to increase its holding up to 20% of the issued share capital of the Company.

Lawrence Stroll will join the Board and become Executive Chairman as Aston Martin Lagonda Chair, Penny Hughes, steps down from the role.

Penny said: “The difficult trading performance in 2019 resulted in severe pressure on liquidity which has left the Company with no alternative but to seek substantial additional equity financing. Without this the balance sheet is not robust enough to support the operations of the group. Notwithstanding recent weak trading, the strength of the Aston Martin brand and our expanding portfolio of cars has allowed us to attract a strong new partner in Mr. Stroll to support the turnaround of the business.”

Andy Palmer, Aston Martin Lagonda President and Group CEO, said: “As we announced on 7 January 2020, the past year has been a regrettably disappointing and challenging time for the Company. Despite our continued efforts, the difficult trading conditions and resulting poor performance in 2019 has put the Company in a stressed position with severe pressure on liquidity and affected our ability to deliver against our original plan. Today’s fundraising is necessary and provides a platform to support the long-term future of the Company.  Mr. Stroll brings strong and proven expertise in both automotive and luxury brands more widely which we believe will be of significant benefit to Aston Martin Lagonda. Following a comprehensive review, today we announce a series of immediate actions to reset, stabilise and de-risk the business, positioning it for controlled, long-term profitable growth. These include rebalancing supply-demand dynamics, reducing capital expenditure and the re-phasing of some future product launches, together with cost-efficiency initiatives.

“We are focused on turning around performance, restoring price positioning and delivering a more efficient operational footprint. We will deliver some exciting new products this year with the much-anticipated DBX during Q2, Vantage Roadster in the spring and Aston Martin Valkyrie deliveries starting in H2. 

“We have also announced plans to leverage a new motorsport collaboration with Racing Point to enhance the execution of the plan.  I would like to thank Red Bull Racing, who we will continue to sponsor this year, for their partnership and support in us being able to say this today.

“The actions announced today will allow us to implement and deliver on our reset plan and provide Aston Martin Lagonda with a sustainable platform for the future.” 

Mr. Stroll said:  “I am very pleased that I, and my partners in the Consortium, have reached agreement with the Board and major shareholders to make this significant long-term investment. Aston Martin Lagonda makes some of the world’s most iconic luxury cars, designed and built by very talented people. Our investment announced today underpins the Company’s financial security and ensures it will be operating from a position of financial strength.

“On completion of the £500m of fundraising I look forward to working with the Board and management team in Aston Martin Lagonda to review and improve each aspect of the company’s operations and marketing; to continue to invest in the development of new models and technologies and to start to rebalance production to prioritise demand over supply. 

“I, and my partners, firmly believe that Aston Martin is one of the great global luxury car brands. I believe that this combination of capital and my experience of both the motor industry and building highly successful global brands will mean that, over time, we fulfil Aston Martin Lagonda’s potential.”