Aston Martin Lagonda, the UK’s only listed carmaker, has issued a second profit warning in as many months and announced a £210m fundraising effort. The company’s shares hit a two-year low, falling 5.5% to 102p in early trading on Wednesday.
The Midlands-based luxury car manufacturer revealed late on Tuesday that it plans to raise £110 million of new shares from shareholders and secure a further £100 million of debt financing at interest rates exceeding 10%. These funds are intended to support the company’s ongoing operations and future growth initiatives.
Aston Martin has reported delivery delays on almost half of its expected £2m Valiant hypercars, dragging down expected operating profits. The company now expects operating profits to be between £270m and £280m, down from the £285m previously expected.
Adrian Hallmark, who became the company’s fifth CEO in as many years in September this year, had already revised the financial outlook in a trading update seven weeks ago. Following the recent reshuffle and news of the refinancing, Hallmark said: “We have already taken decisive action to better position the group for the future, including a more balanced production profile and delivery in the coming quarters. These efforts will strengthen operational and financial performance in 2025 and beyond. The financing What we do supports our growth and provides investment to continue product innovation in the future.
In a company statement, Aston Martin said the new funding would help fund its £2 billion commitment between 2023 and 2027, which includes the company’s delayed transition to electric vehicle production.
The new shares were offered at 100p, representing a 7.3% discount to Tuesday’s closing price. Of the £110m raised through new equity, nearly £50m came from Yew Tree Holdings, led by chairman Lawrence Stroll, whose stake was reduced to 26% after previous fundraisings.
Strategic investors contributed an additional £23 million, including the Public Investment Fund of Saudi Arabia, which previously held a 19% stake; Chinese auto group Geely, which owns 18%; and technology partners Mercedes-Benz and Lucid Motors, which own 9% and 4%, respectively.
Existing shareholders who did not participate in the new share issue will see their holdings reduced by approximately 13.5%.
According to stockbroker Jefferies, the new debt will take Aston Martin Group’s total debt to £1.47bn, with net debt (after cash holdings) at £1.12bn – more than four times expected operating profits. Annual interest expenses are expected to rise to £130 million.
Philippe Houchois, an analyst at Jefferies, commented that raising money would help Aston Martin avoid a “zombie balance sheet”, which would mean insufficient liquidity to achieve a planned operating profit of £500 million next year.