LONDON BRIEFING: Aston Martin Goes Back To Market Cap In Hand

(Alliance News) - Aston Martin Lagonda said Friday it plans to sell new shares totalling up to 19.99% of its current issued share capital in an attempt to secure enough cash to "successfully emerge from the extended Covid-19 lock-down".

The price at which the shares are to be sold will be determined at the close of the bookbuilding process, the luxury carmaker said.

The institutional placing will be run by Barclays, JPMorgan, Morgan Stanley and Deutsche Bank. A retail offer also will be made via PrimaryBid.

"The directors of the company are confident that this additional flexibility will allow the company to pursue its strategy to realise its full potential to operate as a true luxury company and remain focussed on ensuring the company builds the appropriate capital structure for the longer term," Aston Martin added.

Yew Tree Overseas has agreed to subscribe for 25% of the placing and Prestige Motor will buy 7.8%.

Separately, Aston Martin said its retail sales in the second quarter were hit by the Covid-19 disruption. Wholesales are expected to be lower in the second quarter than in the first quarter and wholesale average selling price will continue to suffer from its de-stocking process.

The stock was down 5.3% early Friday. At its current market capitalisation of about GBP900 million, the share offer could raise up to GBP180 million. Aston Martin completed a GBP536 million rights issue back in April.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: up 0.9% at 6,203.39

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Hang Seng: down 0.8% at 24,579.78

Nikkei 225: closed up 1.1% at 22,512.08

DJIA: closed up 1.2% at 25,745.60

S&P 500: closed up 1.1% at 3,083.76

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GBP: firm at USD1.2413 (USD1.2405)

EUR: soft at USD1.1209 (USD1.1216)

Gold: flat at USD1,760.30 per ounce (USD1,760.11)

Oil (Brent): up at USD41.28 a barrel (USD40.44)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Friday's Key Economic Events still to come

China Dragon Boat Festival holiday continues. Shanghai market closed; Hong Kong open.

1200 BST UK Bank of England quarterly bulletin

0930 CEST EU EuroCOIN indicator of euro area economic activity

1000 CEST EU monetary developments in euro area (M3)

0830 EDT US personal income & outlays

1000 EDT US University of Michigan survey of consumers

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BROKER RATING CHANGES

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JPMORGAN RAISES BUNZL TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 2350 (2000) PENCE

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JPMORGAN RAISES RENTOKIL INITIAL TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 560(430) PENCE

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BERENBERG CUTS SAFESTORE TO 'HOLD' ('BUY') - TARGET 750 PENCE

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JEFFERIES CUTS CREST NICHOLSON TO 'HOLD' ('BUY') - TARGET 226 (331) PENCE

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COMPANIES - FTSE 100

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Supermarket chain Tesco said it saw an uptick in sales in the first quarter of its financial year. For the 13 weeks to May 30, Tesco's total sales improved 8% year on year to GBP13.38 billion, with like-for-like sales improving 7.9%. In the UK, sales were up 9.1% to GBP9.91 billion and like-for-like sales improved 8.7%. Growth was most marked online, the supermarket noted, with online sales up 49% for the quarter as a whole and the rate of growth increasing to nearly 100% by the end of May. Sales in its convenience business grew by 9.5% including a particularly strong performance from One Stop. Chief Executive Dave Lewis said Tesco has transformed its stores with "extensive" social distancing measures so that everyone who was able to shop in store "could do so safely". "The costs of doing this have been significant and only partly offset by business rates relief and increased volume. We see the balance as an investment in supporting our customers at a time when they need it most," he added. Looking ahead, Tesco's current expectation is that Retail operating profit in the current year is likely to be at a similar level to financial 2020 on a continuing operations basis.

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COMPANIES - FTSE 250

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Budget airline easyJet has agreed the sale and leaseback of six A320neo aircraft for aggregate cash sales proceeds of USD255 million. The proceeds of this transaction make up part of the anticipated GBP500 million to GBP650 million in funding from sale and leasebacks which was highlighted in the airline's recent trading update - where it noted the sales will be used to "maximise liquidity and further strengthen easyJet's financial position". The net book value of the aircraft, which vary in age from six months to two years of age, was about GBP141 million at March 31.

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Weir Group said it has completed the refinancing of its main banking facilities, with a syndicate of 12 global banks. The facilities comprise a new USD950 million revolving credit facility which will mature in June 2023 with the option to extend for up to a further two years and a new GBP200 million term loan, which will mature in March 2022. The margin on the new facilities is slightly higher than current levels, Weir noted, which reflects market conditions but remains "highly competitive" and significantly lower than the group's existing long-term bonds. Weir said its covenant terms remain unchanged and noted it continues to be "highly" cash generative and has a "strong" liquidity position - which includes about GBP500 million of immediately available committed facilities and cash balances. Turning to trading, Weir said its Minerals business continues to show "resilience" in the second quarter, with aftermarket orders similar to the first quarter. Its ESCO unit has shown "resilience" but has seen customers run down ore stockpiles. In Oil & Gas, Weir saw a "significant" step-down in North American activity levels in during the quarter.

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COMPANIES - MAIN MARKET AND AIM

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Shopping centre owner Intu Properties said it is now "likely" to appoint administrators after failing to come to a standstill agreement with creditors.

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COMPANIES - GLOBAL

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US private equity firm Bain Capital has been announced as the winning bidder for insolvent airline Virgin Australia after the rival bidder withdrew its offer. The bankrupt Brisbane-based company's administrators agreed on Friday to sell the ailing carrier to Boston-based Bain. Private equity firm Cyrus Capital Partners withdrew its offer in the morning, citing a lack of engagement from Deloitte, an accounting firm responsible for the administration, which was set to name a preferred bidder on Tuesday. Virgin Australia entered voluntary administration in April due to the coronavirus and after it failed to secure a government bailout, leaving some 16,000 jobs up in the air. The group's airlines flew to 41 destinations, including major cities and regional communities, and contributed around AUD11 billion - or USD7.6 billion - to the Australian economy every year.

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Friday's Shareholder Meetings

Sportech

DP Poland

Kore Potash

Tesco

Countrywide

Comptoir Group

Proteome Sciences

Revolution Bars (re fundraising)

TruFin

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By Tom Waite; thomaslwaite@alliancenews.com

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