Luxury sports car company Aston Martin plans to raise £653 million ($772 million) from Saudi Arabia’s sovereign wealth fund and shareholders in a deal to free up cash to drive development.
Aston shares climbed as much as 19 per cent in London trading, their biggest intraday jump since June 2020.
“With this capital raise, we are able to remove the significant overhang on our business,” chairman Lawrence Stroll said on Friday.
The carmaker intends to issue 23.3 million new shares to the Saudi Public Investment Fund (PIF) at £3.35 a share, giving it a 17 per cent stake, Aston said in a filing.
The company will undertake a rights issue with the PIF, Mr Stroll’s Yew Tree Consortium and Mercedes-Benz AG investing a combined £335 million.
The Saudi fund will become the second biggest shareholder in Aston Martin, one of the key names in British sports car history and a byword for luxury.
Royals, celebrities and fictional spy James Bond are known to love the cars.
“Today's announcement marks the latest success in the evolution of Aston Martin, the restoration of the business and balance sheet we inherited, and the acceleration of our long-term growth potential,” Mr Stroll said.
“I am delighted to welcome the Public Investment Fund as a new anchor shareholder in the company, alongside my consortium.
“We have a shared vision and our joint participation in this important strategic financing demonstrates both our confidence in the prospects for the company and our commitment to the future success of Aston Martin.”
The PIF will appoint two members to Aston Martin's board.
Up to half of the proceeds will help to repay debt and reduce interest costs, with the rest providing a cushion against the effects of the war in Ukraine, Covid-19 lockdowns in China and supply chain and logistics challenges.
Aston considered and rejected a £1.3 billion equity investment proposal from Investindustrial Group Holdings and Geely International Ltd.
The board said it believes the offer overestimated the company’s capital requirements, would have heavily diluted existing shareholders and been difficult to execute.