Aston Martin has been saved by a Canadian billionaire.
It's no secret that Aston Martin has been looking for a new investor to improve its financial situation. In the first nine months of 2019, the company posted a pre-tax loss of $118 million, while disappointing December sales caused the company's wholesale 2019 volume to drop by seven percent. Rumors have suggested that Canadian billionaire Lawrence Stroll and Geely were planning to buy a major stake in the company. Now, Aston Martin's future has been decided.
A filing with the London Stock Exchange has confirmed that Stroll has bought a 16.7% stake in Aston Martin for £182 million ($240 million), beating Geely. The deal also includes an additional £318 million ($418,569) through a new rights issue, bringing the total investment to a whopping £500 million ($657 million).
Stroll owns one of the most valuable Ferraris in the world and also owns the Racing Point F1 team, formerly known as Force India. As part of the deal, Racing Point will be renamed Aston Martin F1 from 2021. The £500 million investment will include £55.5 million of short-term funding to improve the liquidity of the company and ramp up production of the Aston Martin DBX.
Aston Martin says the deal will "strengthen its balance sheet to necessarily and immediately improve liquidity and reduce leverage" following "the disappointing performance of the business through 2019." As part of the investment, Stroll will also become Executive Chairman of Aston Martin, while Dr. Andy Palmer will remain CEO.
Aston Martin's recent setbacks have also prompted the automaker to revise its product plan and delay investment in electric vehicles until beyond 2025. The relaunch of the Lagonda luxury electric car brand has been delayed until after 2022, while the Rapide E been "paused pending a review."
The Aston Martin Valhalla is still on track for 2022, while the DBX, arguably Aston Martin's most important model, will launch later this year. Aston Martin has already received 1,800 orders for the DBX.
The Aston Martin Vantage will also be updated this spring with a new Roadster version and Valkyrie deliveries will start later this year. The aim is to cut costs by £10 million a year. The reborn Vanquish will now be revealed after the Valhalla in 2022 and the company is also developing "fuel-efficient, modular V6 engine with hybrid capabilities" that will be introduced in the mid-2020s.
Limited-edition special models will still be developed, with plans to launch one "heritage special" like the DB4 GT Zagato Continuation and two "contemporary specials" delivered each year. In short: there's still plenty of reason to be excited for Aston Martin.