RE: Positive situation25 Aug 2022 18:33
The Company announces its intention to undertake a proposed equity capital raise (the "Capital Raise") to meaningfully deleverage the balance sheet, strengthen and accelerate its long-term growth. The Company confirms the following plans for a linked primary issuance of shares, subject to shareholder and regulatory approvals:
· a proposed placing of approximately 23.3 million new ordinary shares at a price of £3.35 per ordinary share in the capital of the Company to PIF (the "Placing Shares"), conditional upon the subsequent underwritten rights issue, to raise approximately £78.0 million (the "Placing"), representing approximately 16.7% of the post-placing share capital of the Company; and
· a subsequent underwritten rights issue to raise approximately £575 million (the "Rights Issue" and, together with the Placing, the "Capital Raise").
The Company intends to use the net proceeds from the Capital Raise for the following purposes:
· up to half to repay existing debt, strengthening financial resilience and improving the company's cash flow generation by reducing its interest costs;
· the balance to maintain a substantial liquidity cushion to underpin and accelerate future capital expenditure, and to support execution of its targets in what remains a challenging operating environment, impacted by the war in Ukraine, COVID-19 lockdowns in China, as well as continued supply chain and logistics disruptions
The Capital Raise has been in development for some time, and follows a comprehensive Board review of the Company's optimal capital structure and growth capital requirements over the medium-term and beyond, as well as the debt reduction required in order to achieve a net debt leverage ratio of c. 1-1.5x by 2024/25.
Over the coming years, Aston Martin's capital expenditure profile, enhanced by this Capital Raise, will focus on:
· next year's next-generation front-engine sports cars, and furthering the DBX offering,
· the development of the Group's high margin mid-engine vehicles, including the Valhalla special edition,
· its electric platform for future sports cars/GTs and SUVs, working towards the following timelines:
o 2024: First PHEV targeted for delivery
o 2025: First BEV targeted for launch
o 2030: Fully electrified GT/Sport and SUV portfolio
The Board believes the proposed Capital Raise will serve to further support the Company's re-affirmed medium-term targets of c. 10,000 wholesales, c. £2bn revenue and c. £500m adjusted EBITDA by 2024/25, and strongly positions it for positive FCF generation from 2024.