Aston Martin increases its capital thanks to Saudi Arabia’s investment

Facing financial problems, especially since the crisis of covid-19, the car brand Aston Martin welcomes the investment of Saudi Arabia.

Aston Martin has found new resources to finance itself in the middle of 2022. The company, of which Lawrence Stroll is the co-owner, has received financing from the Saudi Arabian Public Investment Fund. This sovereign fund, the largest in the world, already owns Aramco, title sponsor of the Aston Martin F1 team and partner of F1, as well as shares in the McLaren group, acquired last year.

The 653 million pound capital increase makes the Saudi sovereign wealth fund Public Investment Fund its second largest shareholder. Part of it will be used to “significantly deleverage” the group, the manufacturer announced to calm recent market concerns about its finances. Indeed, its net debt was 957 million pounds as of March 31, up by a third over one year.

The remainder will be used to support investment “in an operating environment that remains challenging, impacted by the war in Ukraine, Covid-19-related closures in China and ongoing supply chain disruptions,” the group added in a statement.

335 million pounds of the total capital increase will be contributed by the PIF, the Yew Tree Consortium, an investor group led by Lawrence Stroll, and Mercedes-Benz AG. The Saudi Sovereign Wealth Fund alone will invest 78 million pounds and will own approximately 16.7% of the company’s capital at the end of the transaction.

Aston Martin also announced that it had rejected a competing offer from the European fund Investindustrial and the Chinese manufacturer Geely for a firm investment of 203 million pounds in capital. The proposal “clearly overestimated the company’s new equity requirements“, according to Aston Martin, which also considered “that it was an attempt (…) to acquire a controlling and potentially majority position“.

“Overall, this is game-changing news for Aston Martin, supporting the execution of our strategic plans and accelerating our long-term growth potential,” the car brand said.

Featured photo : © Aston Martin

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