F1 team owner invests further into Aston Martin

Tuesday, 17 March 2020

It is recognisably an Aston Martin, but the DBX is something completely different for the company - an SUV.

Canadian billionaire and owner of the Racing Point Formula 1 team Lawrence Stroll has increased his consortium's ownership in Aston Martin after the carmaker's shares plummeted.

'In light of recent extraordinary equity market volatility related to concerns over Covid-19, the company has renegotiated certain terms relating to the proposed investment,' the company said in a statement.

The January agreement saw Stroll's investment fund agree on a 16.7 per cent stake in Aston Martin for £182 million (NZ$369m), at a price of £4 per share. This also included a £318 million cash infusion through a new rights issue, for a total of £500 million (NZ$1.01b).

Coronavirus has thrown everybody for a loop but Aston Martin has been hit particularly hard.

As coronavirus continues to rock the automotive industry, Aston Martin's shares have taken a hit. At one point last week they were listed at below £2 each, prompting Stroll and his fellow investors to rework the initial agreement.

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Now, the deal will be worth a total of £536 million (NZ$1.087b), with Stroll's investment fund taking a larger 25 per cent stake in the company at £2.25 per share. The company, called Yew Tree, will also provide £75.5 million in 'short-term working capital support' to ensure Aston can meet the revised investment timetable.

Aston boss Andy Palmer said to Autocar UK: 'We are actively managing the potential impacts of Covid-19 on a daily basis, most particularly in our tier two supply chain, with no disruption to production to date and are mindful of the ongoing uncertainties and risks to the business.'

Tier two suppliers are those who are usually limited in what they can produce and have focuses outside of the automotive world. An example of a tier two supplier would be computer chip makers like Nvidia, which produces the graphics processing units for Mercedes-Benz' MBUX system.

A tier one supplier is a company like Bosch or Panasonic which operates much closer to the OEM.

Palmer continued: 'The first two months of the year were planned to be our smallest in wholesale unit terms, as we start to rebalance supply and demand; a key component of our plan to turn around performance and restore our price positioning. Trading has generally been in line with these conservative expectations, with retail performance slightly better than planned.'

Aston Martin recently killed its 24 Hours of Le Mans project for the Valkyrie hypercar in order to concentrate on Formula 1. The Racing Point F1 team will be rebranded as Aston Martin from next season, with Red Bull presumably losing the AM branding from its cars.

Elsewhere, the company is hard at work getting its DBX SUV ready for prime-time, of which it has a claimed 4000 pre-orders for. Additionally, Aston is preparing the Valhalla hybrid sports car as well as the latest edition of Vanquish for a full debut.