Aston Martin chair’s £125m funding boost aims to counter losses

Aston Martin will raise more than £125m through funding from its chair and the sale of its stake in his Formula One team as it battles ballooning losses and tariffs imposed by US President Donald Trump.

Shares of the company famous for being fictional secret agent James Bond’s car of choice had surged 11.8% to 72.95p in morning trade on Monday.

The equity raise is Aston Martin’s seventh since the arrival in 2020 of chair Lawrence Stroll, who has pumped about £600m into the luxury carmaker.

Delivery delays and depressed demand in China have plagued the company in recent years, forcing it to cut 5% of its workforce last month.

Stroll’s Yew Tree Consortium will invest a further £52.5m by purchasing 75-million shares at 70p per share. His stake will rise to about 33% from 27.7%, with the possibility of increasing further to up to 35%.

Yew Tree will seek a waiver from a rule that requires an entity owning more than 30% of a UK-listed company to make an offer to buy out the remaining shareholders.

“Exemptions have been granted in the past, yet it feels like a takeover would be a better outcome as it would mean the car company would be free to pursue a turnaround strategy out of the public spotlight,” said Russ Mould, investment director at AJ Bell.

The sale of a stake in the Aston Martin Aramco Formula One team will help the company realise a premium to the book value of about £74m, but will not affect an existing long-term sponsorship deal, the carmaker said.

The Trump administration’s tariff on imported vehicles forced the company to now forecast “modest growth” in annual car volumes, compared with mid-single digit percentage growth earlier.

The US contributed more than a third of Aston Martin’s revenue last year.

Further effects from the levy was being reviewed, the company said, but it backed its target of positive operating earnings in 2025 and being free cash flow positive in the second half.

Reuters