Aston Martin warns on profits and announces £210m fundraising

Aston Martin Lagonda shares hit a two-year low after its latest emergency fundraising and a second profit warning in as many months.
The Midlands company, the only listed carmaker on the London Stock Exchange, said in an announcement late on Tuesday that it was raising £210 million, comprising £110 million from shareholders in new equity and a further £100 million of debt at interest rates of more than 10 per cent.
The company said it was experiencing delays in the delivery of about half its expected £2 million-a-time Valiant supercars, which will reduce operating profits to between £270 million and £280 million from the previously expected £285 million.
The news sent shares in the group down 5.5 per cent, or 6p, to 102p in early morning trading on Wednesday.
Adrian Hallmark, who took over as chief executive in September — Aston Martin’s fifth in as many years — had taken little time in revising down the group’s financial prospects for this year in a trading update seven weeks ago.
Following the latest downward revision and news of the refinancing, Hallmark said: “We are already taking decisive actions to better position the group for the future, including a more balanced production and delivery profile in the coming quarters.
“These efforts will deliver enhanced operational and financial performance in 2025 and beyond. The financing we are undertaking supports our growth and provides the investment to continue with future product innovation.”
In a statement, the company said the financing would help it spend the £2 billion it had committed to between 2023 and 2027, including its belated transition to start building electric cars.
The new shares were placed at 100p, a discount of 7.3 per cent to the closing price on Tuesday evening.
Of the £110 million raised from new shares, it is understood about £50 million came from Yew Tree Holdings, the coterie of wealthy friends led by Aston’s chairman Lawrence Stroll, which took control of the company in 2020 and whose stake had been reduced by subsequent fundraising to 26 per cent.
It is understood a further £23 million has come from “strategic” investors in the company including PIF, the Saudi Arabia sovereign wealth fund, which had held 19 per cent of the shares; Geely, the Chinese automotive group and 18 per cent holder; and Aston’s technology partners Mercedes-Benz, which had held 9 per cent, and Lucid of the US, which had held 4 per cent.
Existing shareholders who have not subscribed to the new shares are diluted by about 13.5 per cent.
According to Jefferies, the stockbroker, the new borrowings will increase group debt to £1.47 billion, and its net debt taking into account cash holdings to £1.12 billion, or more than 4 times projected operating earnings, and will increase its annual interest bill to £130 million.
Philippe Houchois, an analyst with Jefferies, said the fundraising would help Aston avoid having a “zombie balance sheet” — that is, not enough liquidity to hit its planned £500 million of operating profits next year.