Aston Martin got quite a relief for the cash. The British manufacturer of luxury super sports cars — which has filed for bankruptcy seven times throughout its history — announced a new financing of £550 million (R$ 3,74 billion) in the midst of another phase of financial tightening. The agreement is led by the manager HPS Investment Partners and comes at a good time, just when the company’s situation was tightening again.
How the deal was structured
The package combines a £450 million guaranteed loan with an additional £100 million line that can be cashed out by Aston Martin at a later date. The automaker also won authorization to take another £100 million (R$ 680 million) in debt, if necessary.
Much of the resources, however, are not new money entering the coffers: the £450 million will be used to pay off existing debts. Among them is a revolving credit line of £170 million (R$ 1.16 billion) and about £20 million (R$ 136 million) that had been drawn from a £50 million (R$ 340 million) fund maintained by the Yew Tree Consortium — a group led by Lawrence Stroll, billionaire co-owner of the brand and head of the brand also in Formula 1.
According to Chief Financial Officer Doug Lafferty, the investment “significantly strengthens our liquidity” and gives the company more breath and flexibility to execute its current and future product plans. Aston Martin says it expects improved margins and cash generation in the coming years, supported by a mix of “essential and special” models.
Aston Martin Vanquish (Photo: Aston Martin | Disclosure)
And the Chinese?
The announcement comes just months after reports that Chinese giant Geely could be eyeing taking control of Aston Martin. The group already owns Lotus and the maker of London’s electric taxi, and its founder, Li Shufu, is known for his fondness for British brands.
Whether current investors and owners would welcome Geely’s greater influence remains to be seen. But the moment is delicate: Aston Martin’s market value, which was once close to £4.3 billion (R$ 29.2 billion), is now equivalent to about a tenth of that – which would open up room for a major buyer to take advantage of the downturn.
For now, the financing removes immediate risk and gives time for the brand to put its plans on track.
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