Huge $744M Investment Saves Aston Martin From Drowning In Debt

Industry News / 17 Comments

Founded in 1913, the British marque has been bankrupt 7 times.

Aston Martin has been around since 1913 and has seen troubles for many decades. The famed British marque appeared to have a lifeline for a time. Mercedes-Benz bought a stake and Lawrence Stroll's private equity firm Yew Tree became the majority shareholder. With Mercedes' stake being reduced from 11.7% to 7.9% and the largest shareholder now standing at 18.3%, there is a new player to provide the needed bailout for Aston Martin from Saudi Arabia.

The Saudi Public Investment Fund (PIF) has stepped in to invest along with renewed funding from Mercedes and Yew Tree in a deal that totals $744 million USD ( £653M). The move is a bright spot in a list of struggles surrounding the competitiveness of products like the Aston Martin Valhalla and a failing F1 Team.

2023 Aston Martin Valhalla Emblem Aston Martin

"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," Aston Martin executive chairman Lawrence Stroll said to Autocar. "Since I became executive chairman in 2020, we have made significant progress on our journey to become the world's most desirable, ultra-luxury British performance brand."

Canadian billionaire Stroll is a large investor and his son Lance Stroll competes in the Aston Martin F1 car, so they are well connected to the pulse of the company. Stroll's success in business should translate well into stabilizing the company that has survived bankruptcy seven times since its 1913 founding. Although Aston Martin has produced incredible machines like the Victor, the track-only V12 Valkyrie, and the upcoming Valhalla, its products like the DBX and Vantage are what it needs to push in more volume.

Aston Martin plans to take the Saudi investment along with the other two cash injections for important spending on EV technology and to balance its books. Aston Martin planned to be fully electrified by 2030 but while carrying over $1.1 billion in debt, that electric future seemed extremely far away. Or even a future at all. Now, the Saudi PIF cash and stock option injection mean that the 16.7% stakeholder came at a critical time.

Surprisingly, Aston Martin shareholders rejected a larger deal spearheaded by Atlas Consortium a firm that includes Chinese automaker Geely. The consortium also owns the British Morgan brand but Aston Martin declined the offer of over $1.5 billion USD.

It also appears no cost-cutting measures have been announced and the embattled F1 team will soldier on thanks to Stroll's passionate involvement.

Source Credits: Automotive News Europe

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