Canadian billionaire Lawrence Stroll, father of Formula One driver Lance Stroll and key backer of the Racing Point team, is poised to take a bigger stake in Aston Martin following a sharp drop in the automaker’s share price in the past week’s market rout.
Stroll is leading a consortium of investors who in January agreed to pay $239 million for a 16.7-percent stake in the company, as well as inject $72.8 million in short-term funding.
The original deal was to see a rights issue priced at $5.27 per share but Aston Martin is currently trading a price of only $1.72 per share. As a result, Stroll and his investors have renegotiated a deal that will see a rights issue priced at $2.76 per share and the consortium take a 25-percent stake. They will also increase short-term funding to $92.8 million.
Under the new deal, which was announced on Friday, Aston Martin will raise a total $658 million. And like the previous deal, Stroll is in line to take over the role of chairman from Penny Hughes. The transition will take place on April 20.
2021 Aston Martin Vantage Roadster
The new deal will be voted upon by existing Aston Martin shareholders at the automaker’s next general meeting, currently scheduled for March 30. The existing investors are primarily made up of Italian private equity firms and Kuwait’s sovereign wealth fund. Mercedes-Benz parent Daimler also owns a small stake.
“There has been a significant change in the global market environment in which Aston Martin Lagonda operates,” said Stroll. “Whilst the immediate outlook looks increasingly challenging, I remain fully committed to the future of Aston Martin Lagonda and look forward to implementing our plans once the fundraising is complete.”
Aston Martin’s shares trade on the London Stock Exchange and were priced at $24 during its initial listing in late 2018. The price has decreased since then as sales and profits deteriorated over the course of 2019.
And 2020 is shaping up to be even worse. CEO Andy Palmer said the Covid-19 coronavirus has impacted sales in Asia and will likely do the same in other regions. He said the virus is yet to cause any disruptions to production and that Aston Martin is monitoring the situation closely. He also said the company is already accepting orders for the all-important DBX SUV for 2021.