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Agree with your posts of 11:35 and 17:05 respectively carpymick and jack
I'll say thanks too. As carpy said, it is what it is. I think we have to assume they negotiated the best possible deal they could and made the best decision for Aston Martin at the time. If they were unable to get a deal with restructuring it later as an option then so be it.
The thought of them purposefully signing up to a bad rate bond for a fixed term to line the pockets of their friends.... Well its a nasty thought. One that is too negative for me to comprehend. It would make me worry about my investment too much so I'm choosing to assume its not a possibility. Naive or not
Thanks NRL. It is what it is, nothing we can do about it. If we can't refinance for 3 years, it isnt going to stop the Company doing well, it just could have progressed more quickly thats all. I'll have a look at the prospectus when I get some quiet time. Won't be much of that today cos our grandson"s here lol.
Carpymick - response was “I’m afraid we can’t give the names of the institutions who subscribed for the notes, but they are a range of both domestic and international investing institutions.”
Chat - from recollection there is no option to redeem the whole two years before expiry. There was a 12 month before expiry option and an option to repay a fraction (less than half) with set consequences pre 2024. As I say, please read the prospectus (which I appreciate is a whopping document) as it was set out in there.
NRL. I was aware of the speculation that Stroll and colleagues may be the lenders of the money but didn't know you'd had an IR confirming it was mainstream. This does confirm a conflict of interests which is of some concern but I guess we've just got to trust that Stroll and colleagues will do the right thing by the Company when the time is right. At the end of the day, as major share holders, they have far more to gain by the Company doing well and the shares skyrocketing than they do from collecting interest. And they can still retain the bonds if they want, just at a lower rate of interest rate. I'm sure Stroll will have a massive influence (Mr Assertive lol) when the time is right.
Carpy - yeah sure agree with what you say on Stroll.
NRL, Jack - usually there would be an option to repay the (junk) bond some two years prior to when the bond is mature, on 30 Nov 2025 (if that's the date). Means by end 2023 the refinancing could be done. I'd love it if no capital raise was necessary.
Peter. Whether you get back in is for you to decide but I'm sure you know what most people on here believe. Moers came to us with a certain reputation and so far I believe he is living up to it. AML is a completely different Company to what it was 12 months ago...it has gone through a true transformation. We have just seen the first car designed under TM, the vantage F1 which looks hugely desireable and certain to be a great success. This car bodes well for all the other cars that are soon to make an appearance under the watchful eye of TM. I genuinely believe the Company is on the road to make a fantastic recovery and make us a lot of money in the next few years. That's my honest opinion,but I'm no expert as you very well know Lol.
Carpymick and jack - the prospectus last autumn set out the rights, consequences and limitations on refinancing the debt. From recollection as it is circa 6 months since I looked at the prospectus, I think we are lumbered with most of debt at current rate until 2024. Two key things for me were: Gregor and rest of management team were comfortable with the rates and share price subsequently increased (showing market happy); and the name(s) of the lender was never released. In other shares I have invested in the lender has always been named. IR advised me it was a mainstream lender. Appreciate was discussed on here at the time but I Still have reservations if Stroll and mates are part of the lenders.
You make some excellent points there Jack. As I've said before, its all about timing and I think we can trust Stroll to get that one right. As you say, if we wait a while, maybe until we have an influx of revenue from valkyrie, we may be able to pay down the debt so when we refinance we can get a much better interest rate and at the same time borrow less. Whatever, I think we're agreed it's a given that it's going to happen, it's just a question of when.
I agree Chat, I'd rather keep my shares ss long as possible too and watch them continue to grow. What we dont know is Strolls end game, maybe this is a keeper for him who knows, it maybe that he'll want to keep it as long as Lance is in F1. Lets hope he stays in good health...thats another issue when he's 61.
I don't think we'll need Mercedes help with refinancing the debt. If moers has made the efficiency savings he claims to already with more on the way then we won't be far turning a profit.
When the bond was issued the world was in a very different state. To get investors to put their money into saving aston (which at the time was very risky) instead of easy gains to be made in other stocks during the pandemic, a shockingly high rate was required.
Now with the company turning the corner and the world supposedly recovering faster than expected from covid a lot of that risk has gone. There are fewer easy wins for investors as a result. So the two combined mean that were a rate to be renegotiated today it would be significantly less IMO.
There will obviously be a price for refinancing early. And how steep that price is will depend on whether its doable. That's where we have to rely on aston's prior negotiation skills when acquiring the bond. When it was announced there was widespread shock (rightly so) at the rate we were being charged. The forecasts had been from 8% to 10%.
My hope is that we agreed to pay a higher rate in return for a cheaper get out. And that the plan all along was to refinance ASAP.
When the pandemic is truly done it will be interesting to see where we stand. Will we need as much cash in reserve? Will we be turning a healthy profit? Will our SP and market cap have risen? Will the analysts have better ratings on us? As C2645sg has rightly pointed out, the current bond is a "junk" bond. Only the worst rated companies would be expected to pay that kind of rate. I'm hoping for a much much improved rate if we're able to get a new bond (either from the same place, or a different place to pay off the old one)
Yes, exactly I believe so: "Expanded DBX range, facelifted sports cars, mid-engine cars and a clear plan to EV." Once AML turns a decent operating profit, the matter with the debt will be taken care of next either way and then the shareprice will never look back, again. Perfect for my long term horizon, though I don't want and wouldn't call it a merger with Mercedes, it will be a simple increase in their equity stake imo, yes when Stroll sells or capital is raised to some extent. I'd rather keep AML shares as long as possible than getting Mercedes shares in exchange for them.
Agree. All these articles about Moers have me thinking about getting back in. What he says he has accomplished is incredible.
Stroll won't want a merger for a few years yet Peter. First he'll want to drive up the value of the Company so that he can demand the highest possible price and that's when us share shareholders can make a killing. In the meantime it's inevitable that he'll refinance the debt. TM will first continue to drive down efficiencies, he's said he's targeting costs of goods and materials next. Sales will increase and revenue will go on a steep climb with valkyrie. Stroll will then just pick the right moment to refinance the debt...it's all about timing. Once we've refinanced the debt there's no looking back IMO. Expanded DBX range, facelifted sports cars, mid-engine cars and a clear plan to EV.
That should be destocking not restocking.
Carpy, exactly. Mercedes already owns 5% and has rights to another 15%. The next logical step would be a merger.
On the other hand Moers says AML is on track for 35 to 45 percent gains in efficiency in manufacturing. This combined with build to order and the restocking not only of vehicles, but of work in progress and service parts and you can see a surprising increase in profit margin.
With better margins AML should be able to refinance debt at a better rate.
Asking Mercedes to pay off the debt in exchange for more shares sounds like a reasonable option Chat. However, it would obviously depend what percentage of the Company they wanted. There's no doubt though, the share price would surge without the debt weighing us down. Of course it may have already been considered. On your second point, I do wonder how many people actually realise that the agreement with Mercedes is only for 7 years. Of course by 2027, Stroll may have sold the whole lot to Mercedes...who knows.
I wouldn't want to disagree with what's mentioned here though I want to add the only smart and practical solution to the dept issue looks to me is that Mercedes increase their holding even more beyond the 20% at the right time in exchange for a capital injection. As a private investor, I'd be okay with the dilution of my own holding as the interest on the debt is horrendous and I hardly see any better partner but Mercedes - sure not Geely. Along with that, I want to see a perpetual agreement with Mercedes on technology on that occasion, replacing the current one that is nice except don't like it's running out in 2027.
Thanks C26. I didn't actually know that you traded some but did suspect as much which is fine by me. As I said earlier, I had a go myself and it didn't work out for me so I prefer not to take the risk and just hold.
I have been honest all along Carpy, I am a shareholder who holds a core amount and trades on top of that.
There is no borrowable stock for AML, so only hedge funds and the big boys can short (and most of that is hedging their long positions imho).
I don't short any single stock, only indices/commodities where no-one gets hurt, except myself if it goes wrong ;)
That's fair enough C26 I'm happy to be corrected. I'm often wrong as my wife regularly tells me lol. The £250m -£275m is obviously just for this year ( currently). As you rightly say it can all change and I am sure it will as TM continues to drive efficiencies. The thing is here, we really are just splitting hairs over these amounts. The point I have repeatedly wanted to make is that I think Stroll's targets are conservative. I dont believe that he and his billionaire colleagues would be here if they thought the end game was just £500m EBITDA less the interest and CAPEX that we are arguing over. They expect way beyond that and maybe it wont be until after EV that the big money starts rolling in, who knows, but they are here because they expect to make huge amounts, otherwise they wouldn't be interested. And that's why most of us LTHs are here, because we believe Stroll will overachieve in the long run. That includes you if in fact you do hold shares as you keep on telling us. You wouldn't be here based on the figures you show us unless you BELIEVE Stroll will overachieve (nor would I). Unless of course you are a trader or a shorter...whichever it is doesn't matter to me. So which is it C26...shareholder, trader or shorter? Be open and honest with with me. Regards Carpy
.....and I just spotted your quote 2 paragraphs down fro mine, 2 different figures.
One seems to be generally for the future and one seems to be for this year in particular.
It's all guidance anyway, therefore it can change.
Wise words Carpy.
Polite discussion is the way forward, ignore/filter anyone who is only here to disrupt.
Here's a copy/paste from the recent RNS for Q1 figures:
The significant progress we are making to transform Aston Martin underpins our confidence in delivering our medium-term plans and targets. By 2024/25:
- c.10,000 wholesales, c.£2bn revenue and c.£500m adjusted EBITDA
- Annual capex and R&D £250m-£300m"
Catfish. I have been trying to demonstrate that C26 is giving out of date figures regarding CAPEX and interest and also trying to learn a bit more from Peter about where the deposits fit into the accounts. Nothing more, nothing less. Whilst we're on the subject though, maybe I do look at things a bit differently to some people on here. Whether they are traders, shorters, or just investors with a negative attitude, it doesn't mean I have to be abusive towards them, dislike them or even refuse to communicate with them (tho I have with C26 on occasion when hes gone on too much). They are just trying to make money like the rest of us. I even tried trading the share myself early on last year...made a few extra shares the first couple of times then lost £3000. Gave up after that lol and have just stuck as a definite LTH ever since. So I don't get nasty with people, I don't understand why you would, and I know some people say shorters cause people to lose money but I think those people shouldn't be so stupid, they should have done their research and not been so influenced by shorters...some may say I'm hard in that respect but everyone must take responsibility for their own actions. I like to hear what everyone has to say so that I can carefully consider all the negatives as well as the positives but we can always filter if we want to. I do go through periods where I dont communicate much because I really don't like all this confrontation as it reminds me of the relentless meetings at work from which I am now thankfully retired. Over and out for now...Hopefully I haven't upset anyone with my ramblings :-)))
Catfish you are acting like an anti-social here. I thought ist couldn‘t get any worse. But you‘re still a much bigger troll than C26!