Aston Martin turns to stock offering to bolster capital
INTERNATIONAL - Aston Martin said on Friday it would issue new shares worth up to 20 percent of its existing equity capital as the luxury carmaker seeks additional funds to ride out the coronavirus crisis.
New owner Yew Tree will pick up 25 percent of the offering, with Prestige Motors, which has steadily reduced its holding in the company having previously been the main shareholder, planning to buy about 8 percent, the company said.
Aston Martin, which in May posted a deep first-quarter loss after sales dropped by nearly a third, also said its retail sales and wholesales are expected to fall further in the second quarter compared with the first.
The company has been cutting jobs and streamlining its operations as it seeks to bring its cost base in line with its move to reduce sports car production levels.
“We are making very good progress on my first priority, the rebalancing of supply and demand and reducing dealer stock as we reset the business and restore exclusivity,” said Chairman Lawrence Stroll, the Canadian billionaire who took over the role earlier this year after taking a 20 percent stake in the company.
Aston Martin, famed for being James Bond’s carmaker of choice, also said it had received approval for a Coronavirus Large Business Interruption Loan Scheme (CLBILS) loan of 20 million pounds ($24.83 million).
The company has been plagued with the coronavirus crisis, much like other carmakers, with lockdown to prevent the spread of the disease leading to a 97 percent annual plunge in British new car sales in April to the lowest level of any month since February 1946.
The stock opened 5.8 percent lower at 68 pence on the London Stock Exchange.Reuters