Aston Martin announces £653m capital raise; Saudi's PIF takes 17% stake

Luxury car maker Aston Martin has announced a £653m equity capital raise to "meaningfully" de-leverage the balance sheet, in a move that will result in Saudi Arabia’s sovereign wealth fund becoming its second-biggest shareholder.

The company will place 23.3m shares at 33p each with Saudi Public Investment Fund (PIF) to raise £78m in exchange for a 16.7% stake. This will make PIF the car maker’s second-largest shareholder after chairman Lawrence Stroll. There will also be a rights issue to raise £575m.

Aston Martin said it will use up to half the proceeds to repay existing debt, strengthen financial resilience and improve cash flow generation by reducing its interest costs.

The rest will be used to maintain a substantial liquidity cushion to underpin and accelerate future capital expenditure, and to support execution of its targets in what remains a "challenging" operating environment, impacted by the war in Ukraine, Covid lockdowns in China, and supply chain issues.

Executive chairman Lawrence 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.

"Overall, this is a game changing event for Aston Martin, supporting the delivery of our strategic plans and accelerating our long-term growth potential. It transforms our balance sheet, liquidity and cashflow profile and provides greater clarity on our pathway to become sustainably free cash flow positive and create significant shareholder value."

The company also backed its 2022 outlook on Friday as it hailed continued strong demand trends.