Aston Martin raises £650m as Saudi Arabia takes a stake

theguardian.com:

Aston Martin Lagonda has received a large investment from Saudi Arabia as part of raising £650m of capital to pay down the luxury sportscar maker’s large debts.

The British manufacturer has not been able to generate cash needed to invest in new models and electric technology, and has also struggled with delays to its Valkyrie hypercar and its newest DBX 707 sports utility vehicle.

The Saudi Public Investment Fund (PIF), led by the controversial crown prince, Mohammed bin Salman, will buy shares worth £78m, and will take part in a £575m rights issue that will leave it as the second-largest investor after Yew Tree, the consortium led by the billionaire fashion mogul Lawrence Stroll that took over Aston Martin in early 2020 as it approached bankruptcy.

Shares in Aston Martin hit a record low below 355p on Friday after the deal was announced, before recovering some of this week’s losses to jump 17% to 433p. Its stock market value has slumped from £1.6bn at the start of the year to only £432m on Thursday evening, amid persistent concerns from investors over its financial health.

The fundraising will represent yet another effort by Aston Martin to put itself on a stable footing after years of struggles as a FTSE 250 listed company. In May, Stroll appointed the former Ferrari boss Amedeo Felisa as its third chief executive in three years to try to revive its image as a maker of exclusive sportscars favoured by James Bond in the spy film franchise.

The carmaker will use as much as half of the new capital to pay down debt, which is currently costing it £130m a year in interest.

The rest will give it a “substantial liquidity cushion to underpin and accelerate future capital expenditure”, amid what it described as a “challenging