Luxury car manufacturer Aston Martin Lagonda witnessed its shares plummet to a two-year low following an emergency fundraising announcement and its second profit warning within two months. The Midlands-based company revealed plans to raise £210 million through a combination of £110 million in new equity from shareholders and £100 million in debt, carrying interest rates exceeding 10 per cent.
The prestigious automaker disclosed delays affecting approximately half of its anticipated Valiant supercar deliveries, each valued at £2 million. This setback has forced the company to revise its operating profit forecast downward to between £270 million and £280 million, falling short of the previously projected £285 million. The news triggered an immediate market response, with shares dropping 5.5 per cent to 102p during early Wednesday trading.
Adrian Hallmark, who assumed the role of chief executive in September – marking Aston Martin’s fifth CEO in as many years – had already adjusted the group’s financial outlook downward during a trading update seven weeks prior. The latest refinancing arrangement aims to support the company’s ambitious £2 billion investment programme scheduled between 2023 and 2027, including its delayed entry into electric vehicle production.
The share placement was executed at 100p, representing a 7.3 per cent discount to Tuesday’s closing price. Yew Tree Holdings, led by chairman Lawrence Stroll, contributed approximately £50 million to the equity raise. Additional strategic investors, including Saudi Arabia’s PIF, Chinese automotive group Geely, and technology partners Mercedes-Benz and Lucid, also participated in the funding round.
According to Jefferies’ analysis, the new borrowings will elevate the group’s total debt to £1.47 billion, with net debt reaching £1.12 billion – more than four times projected operating earnings. The arrangement is expected to increase the annual interest burden to £130 million, though analysts suggest it will help Aston Martin maintain sufficient liquidity to achieve its targeted £500 million operating profit for the coming year.
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