Billionaire Stroll to increase stake in Aston MartinMarch 14, 2020
The investment fund, led by billionaire Lawrence Stroll, redesigned its planned investments in Aston Martin, resulting in a larger piece of the company.
While other car firms also suffered, the stock price of the British company was particularly affected by market uncertainty caused by the coronavirus pandemic. At some point earlier this week, stocks were quoted at £ 2 each.
In January, the Stroll investment fund agreed to acquire a 16.7% stake in Aston Martin for £ 182 million at a price of £ 4 per share. The deal, which Autocar first reported, also included £ 318 million in cash through a new issue of rights totaling £ 500 million
Given the sharply reduced value of Aston shares, Stroll and his fellow investors have radically redesigned the agreement. The total amount of the revised transaction will amount to 536 million pounds, and the investment fund Stroll, called Yew Tree, acquires more than 25% of the company at a price of £ 2.25 per share. Yew Tree will also provide 75.5 million pounds sterling as “short-term working capital support” so that Aston has the liquidity necessary to meet the revised investment schedule. This is an increase of £ 20 million over initial plans.
The annual general meeting, scheduled for March 16, was postponed by a vote on the approval of a new power of attorney transaction.
Stroll said: “There have been significant changes in the global market where Aston Martin Lagonda operates. What has not changed is our commitment to provide the Company with the necessary financing needed to manage this period, reload the business and realize its long-term potential. “After recent changes in the price of shares and discussions with the Board of Directors, I and my consortium of investors agreed that we will now acquire 25% of the company’s shares and fully use our rights in exchange for long-term investments. In addition, we agreed to allocate an additional 20 million pounds for short-term financing to support the company, resulting in a total of 75.5 million pounds. As the near-term prospects are becoming increasingly complex, I remain fully committed to the future of Aston Martin Lagonda and look forward to implementing our plans after the fundraising is complete. ”
Announcing the deal, Aston Martin Lagonda said it “actively” managed its supply chain and business during the spread of the Covid-19 virus. It states that he has taken public health measures to protect his staff.
The company also said that, despite interruptions in the supply of some parts from China, “to date, this has not affected production”, and deliveries were provided “at least until early April.” Aston noted that Covid-19 influenced consumer demand in China and Asia, adding that it “can do the same in other markets.”
Aston CEO Andy Palmer said: “We actively manage the potential impact of Covid-19 on a daily basis, especially in our Tier 2 supply chain, without interruptions in production to date and remember the continuing uncertainty and risks to the business. “The first two months of the year were supposed to be the smallest in bulk terms as we begin to rebalance supply and demand; A key component of our plan is to change productivity and restore our price positioning. Trade generally met these conservative expectations, and retail performance was slightly better than planned. ”
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