Aston Martin is closing in on a deal to raise significantly more than £500mn by bringing in Saudi Arabia’s sovereign wealth fund as a major shareholder and holding a rights issue for investors, according to two people.
The luxury carmaker’s board will meet on Thursday evening to discuss the fundraising plan, which is expected to be announced as early as Friday, the people said.
The proposal will result in the kingdom’s Public Investment Fund, PIF, investing up to £200mn for a shareholding of slightly less than 20 per cent and a seat on the carmaker’s board.
PIF is one of the world’s largest investors, and owns stakes in electric carmaker Lucid and British supercar group McLaren.
The planned financing would also involve Aston launching a rights issue for investors that will be at least £300mn, and could be considerably higher.
The exact size of the rights issue will be decided in the board meeting, the people added. Chair Lawrence Stroll and his Yew Tree investment consortium have already agreed to take up their options.
Aston’s board has also recently received a separate investment proposal from China’s Geely, which it will consider during Thursday’s meeting, three people said.
The Chinese carmaker’s proposal includes both an equity investment and a wider collaboration with the global Geely family of brands, which includes Lotus and Volvo Cars, one of the people said. Geely is also a shareholder in Mercedes-Benz, which itself holds a stake in Aston.
Aston Martin and Geely declined to comment. A representative for PIF did not respond to a request for comment.
The money will be used to pay down the company’s debt, helping it become cash positive and driving away persistent investor fears about the business’s financial health.
The group had £957mn of net debt at the end of March, and last quarter said it expects to pay about £130mn in debt interest this year.
Aston Martin has been seeking additional funding for its next generation of sports cars and as it prepares to branch into electric models.
The fundraising is the latest move by owner and chair Stroll to try to shore up the business during a turnround that aims to restore its luxury credentials and make the brand highly profitable by the middle of the decade.
Stroll has an existing relationship with Saudi Arabia’s Aramco, which joined Aston Martin’s Formula One team as a named partner earlier this year. Raising the brand’s profile through racing is part of Stroll’s strategy to attract buyers, along with launching mid-engine supercars to take on Ferrari.
The company wants to release its first all-electric sports car in 2025, yet will need to invest in the programme. It is also expected to unveil a refreshed line-up of its sports car range.