Aston Martin will issue new shares worth around 20% of its existing capital as part of a series of measures to raise about $440 million to help it recover from the coronavirus pandemic.
The struggling British firm lost $214 million in the first quarter of this year as lockdown restrictions caused demand for its sports car range to plummet. The latest measures are designed to boost Aston Martin’s finances as it gears up to begin deliveries of the crucial DBX SUV next month.
The company will issue new shares worth 19.99% of its existing ordinary share capital. New chairman Lawrence Stroll’s Yew Tree consortium will buy 24.99% of those shares, with Prestige Motor Holdings taking 7.78%.
The firm has also received approval for a Coronavirus Large Business Interruption Loan Scheme loan of $36 million and is also planning to draw down around $100 million of borrowing.
Under Stroll’s leadership, Aston Martin has recently worked to reduce its dealer stock and cut production of its sports car models, which will involve the loss of around 500 jobs. Stroll said the new steps will “improve financial flexibility in a period of ongoing uncertainty” and provide “additional funding to executive the business plan”.
The company has also undergone a major restructuring, with the departure of former chief executive Andy Palmer. Mercedes-AMG boss Tobias Moers will replace him and is due to start in August.
Stroll said full production of the DBX has now begun at Aston’s new St Athan plant, with deliveries on course for July. He also said development work has resumed on the Valkyrie hypercar, which is set to be launched next year.
Around 90% of Aston Martin’s dealerships have now reopened following the coronavirus pandemic, although the firm expects sales to remain low in the current financial quarter. Aston Martin said it has strong demand for the DBX and predicts the SUV will account for around half its wholesale sales this year.
Although the St Athan plant is fully operational, Aston’s Gaydon facility remains closed as it lowers its stock of sports car models. The firm has yet to give a date when the Gaydon facility will reopen.