Geely becomes Aston Martin’s third-biggest shareholder

Aston Martin’s stock popped nearly 22% on Thursday, after the luxury carmaker announced a £234m (R5.6bn) investment by China’s Geely that will see the automotive firm become its third-largest shareholder.

Geely will acquire about 42-million ordinary shares from chair Lawrence Stroll’s Yew Tree, which is Aston Martin’s largest stakeholder, at 335p apiece and subscribe for another 28-million shares at the same price.

The fresh issue will garner about £95m in cash proceeds for the British firm.

For Aston Martin, the preferred ride of fictional secret agent James Bond that has gone bankrupt seven times in its history, the investment paves the way to secure its long-term future and allows the century-old firm to lower its debt.

“They offer us a deep understanding of the key strategic growth market that China represents, as well as the opportunity to access their range of technologies and components,” Stroll said in a statement.

Geely, which owns multiple brands including British sportscar maker Lotus, Zeekr, Volvo and — via a joint venture with Volvo — Polestar, had acquired a 7.6% stake in the Formula One team sponsor in September last year.

That came after the carmaker rejected Italian investment group Investindustrial and Geely’s proposed funds of up to £1.3bn in July.

“Our decision to increase our shareholding in Aston Martin reflects our confidence in the company’s growth prospects, its technologies and its management team,” said Geely chair Eric Li.

The investment gives Geely a 17% stake in the company and entitles it to one board seat, behind number two shareholder Saudi Arabias Public Investment Fund (PIF). 

Reuters