(Alliance News) - Aston Martin Lagonda Global Holdings PLC on Monday proposed a GBP210 million placing, including a retail offer, of new shares to support its balance sheet.
The Gaydon, England-based luxury car manufacturer said the proposed placing would be used to "further deleverage its balance sheet, as well as providing an accelerated pathway towards achieving its net leverage ratio targets and becoming free cash flow positive from 2024, supported by a significant interest cost reduction".
These targets include achieving a net leverage ratio towards 1.0 times in 2024/25 and becoming free cash flow positive from 2024, alongside "significant" interest cost reduction and achieving a net leverage ratio of below 1.0 times in 2027/28.
It noted existing shareholders represented on the board have committed to subscribe to up to GBP184 million, while it received irrevocable undertakings to subscribe for approximately GBP115 million of the placing from Yew Tree Overseas Ltd, Public Investment Fund, Geely International (Hong Kong) Ltd and Mercedes-Benz AG.
The company also noted a separate retail offer, with certain directors agreeing to subscribing to around GBP1.5 million.
Aston Martin expects to invest around GBP2 billion over the next five years as it "invests in its long-term growth and the transition to electrification".
It added the placing would "facilitate the early redemption of the group's existing second lien split coupon notes, due 2026, as well as supporting capital investments related to the company's electrification strategy".
"From a position of strength, including our recently announced H1 results and the tremendous demand we have seen for our new core and special models, this proposed transaction builds on the actions we have taken to deliver shareholder value," said Executive Chair Lawrence Stroll.
"The share offering will allow us to redeem our most expensive debt, accelerate the pathway we have been on to deleverage our balance sheet and become sustainably free cash flow positive."
Shares in Aston Martin closed up 4.4% to 395.20 pence each in London on Monday.
By Greg Rosenvinge, Alliance News reporter
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Aston Martin Lagonda (AML)
