Aston Martin Raising $660 Million In Rights Issue
Aston Martin is raising 575.8 million pounds in a rights issue as major investors including Saudi Arabia's sovereign wealth fund keep faith with the struggling luxury British carmaker.
The 109 year-old company said it would issue four new shares at 103 pence apiece for every existing share. At 07:50 GMT, the stock was down 10 percent at 432.9 pence. The rights issue is part of a previously announced equity raising of 653.8 million pounds, which makes Saudi Arabia's Public Investment Fund (PIF) one of the company's largest shareholders.
Aston Martin said the rights issue was fully committed and underwritten, with support from PIF, as well as chairman Lawrence Stroll's Yew Tree and Mercedes Benz. The fundraising will allow the company to lower its debt and invest in new models, it has said.
The Formula One racing team owner has been burning through cash and has been hit by supply chain snags. It posted a tripling of pretax half-year losses in July. The company rejected a 1.3 billion pound investment proposal that would have handed control of the business to Italian investor Investindustrial and Chinese carmaker Geely that month.
"Aston Martin's fundamentals remain shaky with or without the capital raise," said Victoria Scholar, head of investment at interactive investor, pointing to the first-half problems. She said a recent slump in the pound could encourage interest from a foreign buyer.
Source: Reuters
