Aston Martin raises £152m to get through Covid-19 crisis

(Sharecast News) - Aston Martin Lagonda has raised £152m from equity investors to get through the Covid-19 crisis and a period of destocking by dealers.


The luxury carmaker said it would issue 304m new shares priced at 50p each - an 8.1% discount to the middle market price when the placing price was agreed.

The shares, sold to institutional and retail investors, represent 19.99% of its share capital before the sale. The £152m raised includes fees to be paid to advisers on the transaction.

Aston Martin announced the fundraising on Friday morning and set the price through a bookbuild carried out by its investment bank advisers. The company had irrevocable undertakings from investors to take up 32.8% of the new shares.

In a trading update the FTSE 250 company said trading was difficult in many markets but that the business was starting to resume more normal operation after disruption by Covid-19. The company was already struggling before the coronavirus shutdown closed its factories and dealerships and has been withdrawing unsold stock from showrooms to balance supply and demand.

Aston Martin shares fell 17.6% to 51.40p at 13:30 BST. The shares have lost 85% of their value in the past year.

Retail sales and wholesales will be lower in the second quarter than in the first three months of the year. But Aston Martin said more than 90% of its dealer network was open with half of branches fully open. All 18 dealers in China have been open since mid-May and "early signs are positive", the company said.

Aston Martin said it would receive a £20m loan under the government's Coronavirus Large Business Interruption Loan Scheme and that plans to draw $68m of delayed draw senior secured notes at 12% coupon had exceeded the order condition. It is also in talks to secure up to £50m of trade financing.

Executive Chairman Lawrence Stroll said: "We have taken decisive action to improve the cost efficiency of the company, in alignment with reduced sports car production levels, and are focused on cost and investment control consistent with restoring profitability. Today we announce further steps to improve financial flexibility in a period of ongoing uncertainty with this additional funding to execute the business plan."

Stroll, a Canadian billionaire, took over as executive chairman in April after making an investment as part of an earlier fundraising. Tobias Moers will join from Mercedes-AMG as chief executive in August, putting Aston Martin under new management.