Saudi Arabia’s public investment fund is in talks with Aston Martin to acquire a stake in the business as the luxury car maker looks to raise additional funds for its next range of cars, according to four people.
PIF, which already has stakes in Lucid Motors and McLaren, is in talks to acquire fresh equity in the business, which could be worth £200m, the people said. Negotiations are at an early stage, they added.
Aston is facing the challenge of funding its next-generation sports car and its first foray into electric vehicles at a time when the business is saddled with debt and generating no net cash.
The company doesn’t expect to start generating cash until 2023, and one of Aston’s first priorities is to start paying down some of its high-interest debt.
The group had £957m of net debt at the end of March and expects to pay around £130m in interest on the debt this year.
Sales were lower than two years ago as Aston reduced its reliance on selling wholesale models to dealerships, while the company was also slower than expected in launching its Valkyrie hypercar model. The business is now looking for new sources of funding for its upcoming generation of vehicles, which are key to the company’s survival.
In a stock market announcement shortly after the Financial Times published the story, Aston said it “regularly reviews its funding options”.
It added: “Each financing option, if explored and pursued, would support and accelerate the company’s future growth.”
The group also said trading was in line with expectations, with “sports cars sold out until 2023 and order intake for DBX [its luxury sport utility vehicle] over 40 percent more than the previous year”.
The discussions represent a reversal from the company’s publicly stated position in February, when chairman and owner Lawrence Strohl insisted the business did not need additional funding.
“Let me be crystal clear, black and white: We don’t need money,” he said at the time.
Aston’s latest fundraising talks were first reported by Autocar magazine. Shares in Aston fell 18 percent on Thursday, following the Autocar report, before recovering later in the day to 435.4 pence – 9 percent lower.
Aston Martin declined to comment beyond the stock announcement. PIF did not respond to a request for comment.
Aston already has a relationship with the kingdom following a deal with Aramco to rename the F1 team.
Stroll, who invested in the company in January 2020, is trying to turn the business around, emptying showrooms of excess cars and trying to refocus supply on genuine customer demand to help restore the brand’s luxury credentials.
Stroll revealed last month that Aston had rejected an approach from Audi about its Formula 1 team entering the sport from 2026. Stroll, whose son Lance races for the team, told analysts last month that he was “very happy with our relationship with Mercedes”.
Mercedes team boss Toto Wolff told the FT last month that the brand could drop one of its three F1 engine customers, one of which is Aston, because of the new rules.
Audi is still in talks with Aston, though not for an equity stake, two people said.
Recommended
Any investment from an existing automaker would be complicated by Aston’s relationship with Mercedes-Benz, which owns a fifth of the automaker’s shares and a technology deal to supply engines and other systems to Aston.
Last month, Aston appointed ex-Ferrari boss Amedeo Felisa as its new chief executive, replacing ex-Mercedes director Tobias Moers. The change makes Felisa Aston the third chief executive in two years.
Additional reporting by Joe Miller in Frankfurt
Add Comment