Aston Martin shares race ahead as it taps Saudi sovereign fund

·2-min read
Aston Martin shares jumped over 20% following the announcement. Photo: Martyn Lucy/Getty
Aston Martin shares jumped over 20% following the announcement. Photo: Martyn Lucy/Getty

Aston Martin Lagonda (AML.L) shares raced ahead on Friday after the British luxury carmaker secured new funding from Saudi Arabia to pay down its large debt book.

The FTSE 250 (^FTMC) rose 22.33% to 454.20p in noon trade in London after announcing it raised £653m from investors including Saudi Arabia's Public Investment Fund (PIF) fund.

The PIF, controlled by Crown Prince Mohammed Bin Salman, is Saudi Arabia’s sovereign wealth fund, one of the biggest in the world.

The Kingdom’s PIF will take a 16.7% share via a £78m ($92.4m) equity placing, making it the second largest shareholder with two board seats.

The deal comes after the brand, a favourite of fictional spy James Bond, shunned a proposed £1.3bn package backed by Chinese car giant Geely.

Read more: China lockdowns hit sales at Burberry and Cartier owner Richemont

Aston will also launch a £575m rights issue, with major shareholder Yew Tree consortium, led by current chairman Lawrence Stroll, Mercedes-Benz (MBG.DE), and the PIF, all agreeing to take up their rights.

Yew Tree, Mercedes and PIF will invest £335m through the rights issue or the fresh shares, leaving other investors to pay up to £318m through the rights issue, which has been fully underwritten.

Around half of the money will be used to pay down debt, which stood at £957m at the end of March, the carmaker said on Friday.

Stroll said: "Today’s announcement marks the latest success in the evolution of Aston Martin, the restoration of the business and balance sheet we inherited, and the acceleration of our long-term growth potential.

"I am delighted to welcome the Public Investment Fund as a new anchor shareholder in the company, alongside my consortium.

"We have a shared vision and our joint participation in this important strategic financing demonstrates both our confidence in the prospects for the company and our commitment to the future success of Aston Martin."

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