Aston Martin has been thrown a lifeline just in the nick of time and it comes in the form of Canadian billionaire Lawrence Stroll, who led a consortium of investors which includes Lord Anthony Bamford of JCB fame.
The Stroll-led consortium, Yew Tree Overseas Limited, will initially be pumping in £182 million (AU$352m) into the financially troubled English car maker, which is mainly owned by Kuwaiti and European private equity groups. The aforementioned sum buys Stroll a 16.7 percent stake in the company at £4 per share (AU$7.73).
Aston will then raise an addition £318 million (AU$615m) through the issuance of new shares, some of which will be purchased by Stroll’s consortium – which raises their stake to 20 percent – for a total invested sum of half a billion Pounds Sterling (AU$968m).
As a result of the cash injection, Aston Martin Lagonda’s share prices jumped roughly 30 percent after the announcement in early February. Furthermore, this deal also means Stroll will become Aston’s executive chairman, replacing Penny Hughes; Group CEO and president Andy Palmer will continue in his current role. The consortium will also be able to appoint a second board member.
Stroll is well-known for his ownership of the Racing Point Formula One team (formerly known as Force India), which under the terms of the new deal will be rebranded as the Aston Martin Formula One works team from 2021. Aston is currently involved in a technology partnership with Red Bull Advanced Technologies to develop and complete the Valkyrie project. The partnership will continue until it has completed deliveries of the hypercar. Aston is also sponsoring the Red Bull Formula One team and will continue to do so in 2020.
Thereafter, a 10-year initial deal comes into effect at which point Racing Point F1 will become the official Aston works team, complete with a five-year sponsorship deal starting in 2021. The Canadian billionaire was also linked to a deal to buy out the Mercedes-AMG Formula One works team at the end of 2020, as we previously reported. Daimler – Mercedes’s parent – is believed to be contemplating its Formula One future beyond the upcoming season. It is believed the Aston deal does not mean Stroll is out of the running. Only time will tell we reckon.
Both these developments mean interesting times are ahead. Aston Martin now has the means to fully-finance the production of its long-awaited SUV, the DBX – which will be produced at their newly-built St. Athan factory in Wales. The AMG-powered luxury SUV is expected to turnaround the company’s poor sales performance. Sadly, Aston will reportedly be eliminating jobs in a bid to slash operating costs.
There is another hiccup though. This deal with Stroll’s consortium has effectively pushed Aston’s electrification plans onto the back burner. The brand has agreed to a ‘reset business plan’ which means its investment in electric vehicles is pushed to 2022 or later. The RapidE project has been “paused pending a review”, claimed the Gaydon-based manufacturer. Aston will instead focus on sports cars such as the Vantage and Vanquish.