13th Mar 2020 17:53
(Alliance News) - Aston Martin Lagonda Global Holdings PLC on Friday said a proposed capital raise has been extended by GBP36 million "as an appropriate measure", while the luxury carmaker grapples market volatility related to the spread of Covid-19.
Back in January, Aston Martin had announced a GBP500 million funding plan, which included an investment by Formula 1 team Racing Point owner Lawrence Stroll, who will take over as the Aston Martin's chair on April 20.
The funding plan, extended to GBP536 million, includes a GBP171 million equity investment by a consortium fronted by Stroll.
The consortium will be issued 76 million new Aston Martin shares at GBP2.25 each, representing a 25% stake in the company.
Shares in Aston Martin closed 3.9% lower at 206.00p each in London on Friday.
Yew Tree, a company controlled by Stroll, will also provide Aston Martin with GBP20 million in cash "over the coming days", in addition to a GBP55.5 million injection in February.
Aston Martin added: "Upon settlement of the placing, it is intended that this GBP75.5 million will be set off against the proceeds of the placing, and the company would still no longer plan to draw the USD100 million of delayed draw notes."
The Valkyrie hypercar maker would also look to secure the remaining GBP365 million through a rights issue
Shareholders Prestige/Strategic European Investment Group and Adeem/Primewagon - which own 57% of the company combined - have approved the placing and rights issue.
Aston Martin said the fundraising has received the support from 65% of its shareholders.
Aston Martin Chief Executive Officer Andy Palmer said: "We are actively managing the potential impacts of Covid-19 on a daily basis, most particularly in our tier 2 supply chain, with no disruption to production to date and are mindful of the ongoing uncertainties and risks to the business. The first two months of the year were planned to be our smallest in wholesale unit terms, as we start to rebalance supply and demand; a key component of our plan to turn around performance and restore our price positioning. Trading has generally been in line with these conservative expectations, with retail performance slightly better than planned.
"In light of the increased uncertainty presented by Covid-19 we are taking actions to safeguard the company through this extremely volatile period."
The company added: "The board believes the measures agreed with Mr Stroll and other large shareholders represent responsible action against a range of possible scenarios given the recent volatility."
By Eric Cunha; [email protected]
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