Saudi Arabia will gain a seat on Aston Martin’s board as it buys a 20 percent share of the troubled automaker.
The luxury brand is seeking at least £500m in new investment in a bid to restore its finances and plans to raise £200m from Saudi Arabia’s Sovereign Wealth Fund, according to the Financial Times. The rest will ask from investors through a rights issue.
The deal, expected to be announced as soon as Friday, will give the Gulf nation’s public investment fund a stake of just under 20 percent of the company.
Aston MartinThe share price has fallen in recent months as it struggles with a rising burden of high-yield debt.
In May, it warned investors to expect a year-to-year interest bill of £130 million and recorded a pre-tax loss of £112 million in the first quarter, more than twice what it was a year ago.
The company was last bailed out by investors led by Canadian billionaire Lawrence Stroll in 2020 after a disastrous stock market debut.
He took over the position of Executive Chairman and fired chief executive Andy Palmerreplaced him by Tobias Moers, who himself retired after an exodus of staff.
Moers was replaced last month by Amedeo Felisa, who was chief executive of Ferrari from 2008 to 2016. Roberto Fedeli, another Ferrari veteran, joined as Chief Technical Officer.
Stroll bought 16.7 percent of the company for £182 million before increasing his stake after the shares collapsed again.
Aston Martin is now worth around £490 million after losing nearly nine-tenths of its value since launching at £4.33 billion in 2018. The company has been consistently loss-making ever since.
The company raised $150 million in 2019 and paid an eye-watering 12 percent coupon at a time when borrowing rates were at an all-time low. Shortly afterwards, Standard & Poor’s downgraded the automaker’s rating to junk status.
Like its competitors, it must find hundreds of millions of pounds to electrify its fleet to meet regulations that spell the end of petrol and diesel cars. Analysts at Third Bridge estimate that £200 million is needed per model to be converted.
Aston Martin has signed an agreement to supply an upcoming battery factory to be built by Britishvolt as part of its pursuit of electric cars.
The company declined to comment.