Aston Martin Lagonda, Britain’s only listed carmaker, has issued a second profit warning in as many months and announced a £210m fundraising. The company’s shares hit a two-year low, falling 5.5% to 102p in early trading on Wednesday.
The Midlands-based luxury car maker announced late on Tuesday that it plans to raise £110m of new equity from shareholders and secure a further £100m of debt financing at interest rates above 10%. The funds are intended to support the company’s ongoing operations and future growth initiatives.
Aston Martin reported delivery delays for around half of its expected £2 million Valiant supercars, leading to a reduction in expected operating profits. The company now expects operating profit to be between £270 million and £280 million, up from the previously expected £285 million.
Adrian Hallmark, who became the company’s fifth CEO in as many years in September, had already revised downwards the financial outlook in a trading update seven weeks earlier. Following the latest adjustment and news of the refinancing, Hallmark stated: “We are already taking decisive actions to better position the group for the future, including a more balanced production and supply profile in the coming quarters. These efforts will deliver improved operational and financial performance in 2025 and beyond. The financing we provide supports our growth and provides the investment to continue with future product innovation.”
In a company statement, Aston Martin said the new funding would help fund its £2 billion commitment between 2023 and 2027, including the company’s delayed transition to electric vehicle production.
The new shares were placed at 100p, which represents a 7.3% discount to Tuesday’s closing price. Of the £110 million raised through new shares, around £50 million came from Yew Tree Holdings, led by chairman Lawrence Stroll, whose stake was reduced to 26% after previous fundraisings.
A further £23m was contributed by strategic investors including Saudi Arabia’s Public Investment Fund (PIF), which previously held a 19% stake; the Chinese car group Geely, which owns 18%; and technology partners Mercedes-Benz and Lucid Motors, which held 9% and 4% respectively.
Existing shareholders who did not participate in the new share issuance will see their holdings diluted by approximately 13.5%.
According to stockbroker Jefferies, the new debt will increase Aston Martin’s total group debt to £1.47 billion, with net debt (after cash positions) of £1.12 billion – more than four times expected operating profit. Annual interest costs are expected to rise to £130 million.
Philippe Houchois, analyst at Jefferies, noted that the fundraising would help Aston Martin avoid a “zombie balance sheet”, meaning there is insufficient liquidity to achieve its planned £500m operating profit next year.