27th Feb 2020 09:23
(Alliance News) - Aston Martin Lagonda Global Holdings PLC on Thursday confirmed details of its GBP500 million funding plan after enduring a torrid 2019 that brought wider losses.
Aston Martin also announced the departure of Chief Financial Officer Mark Wilson "by no later than" the end of April. A process has begun to find a successor. It said the change was "following discussions and by mutual agreement".
The luxury carmaker's revenue in 2019 fell 9% on the year before to GBP997.3 million, with wholesale volumes also down 9%, to 5,862 units.
Gaydon, Warwickshire-based Aston Martin posted a pretax loss of GBP104.3 million for the year, widening from GBP68.2 million.
Turning to the funding, at the end of January, Aston Martin agreed to a series of initiatives to raise GBP500 million, including a GBP182 million investment by Formula 1 racing team owner Lance Stroll.
Aston Martin will place 45.6 million new shares at 400 pence each to raise the GBP182 million, with the shares taken by Stroll's consortium for a 17% stake in the enlarged capital. Stroll will become executive chair in April.
The company also aims to raise GBP317 million in a 14 for 25 rights issue of 153.2 million new shares at a price of 207p. This is a 47% discount to Aston Martin's closing price in London on Wednesday.
Shares fell 15% on Thursday morning to 333.90 pence each. In October 2018, when Aston Martin listed in London, the initial public offering price was 1,700p.
Shareholders Prestige/Strategic European Investment Group and Adeem/Primewagon, who own 57% of the company combined, have approved the placing and rights issue. Prestige/SEIG is taking up its entire entitlement, but Adeem/Primewagon will take up 39% rather than 50% previously indicated.
Overall, Aston Martin has received undertakings from 65% of its shareholders to approve the placing and rights issue.
"The company's operational and financial review has highlighted the immediate need for additional liquidity to fund its short-term working capital needs, strengthen the balance sheet and ensure the group has a capital structure that will enable the group to successfully deliver the reset of the business plan," said Aston Martin.
The "reset" of the business plan will see the mid-engined portfolio remain a "key focus", starting with the launch of Valhalla in 2022 and a delay to investment into electric vehicles to no earlier than 2025.
Aston Martin is launching the DBX range of SUVs in February, with total orders now in excess of the planned retail target in 2020.
Looking to 2020, sports car wholesales are expected to be "materially lower" than 2019 as the company focuses on reducing dealer inventories. Adjusted earnings before interest, tax, depreciation, and amortisation is seen "almost entirely" second-half weighted in 2020.
Aston Martin has also warned on the impact of coronavirus, which could impact both the supply chain and customer demand in China, as well as other markets.
"We are focused on turning around performance, restoring price positioning by operating a pull versus push model, reducing dealer inventories to a luxury norm and delivering a more efficient operational footprint," said Chief Executive Andy Palmer.
"This year, in the second quarter we plan to launch the DBX and Vantage Roadster; and Aston Martin Valkyrie deliveries are set to start in the second half. DBX and our entrance into the luxury SUV market is a key moment for us, therefore it is crucial that it is delivered to customers with the highest quality standards.
"With our revised plan and appropriate funding in place, I believe we will have the building blocks in place to secure the necessary financial turnaround of the business consistent with our position as a luxury automotive company," Palmer added.
By George Collard; [email protected]
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