Aston Martin Lagonda, the UK’s only listed carmaker, has issued a second profit warning in as many months and announced a £210 million fundraising effort. The company’s shares hit a two-year low, dropping 5.5% to 102p in early trading on Wednesday.
The Midlands-based luxury car manufacturer revealed late on Tuesday that it plans to raise £110 million in new equity from shareholders and secure an additional £100 million in debt financing at interest rates exceeding 10%. The funds aim to support the company’s ongoing operations and future growth initiatives.
Aston Martin reported delays in delivering about half of its expected £2 million Valiant supercars, leading to a reduction in projected operating profits. The company now expects operating profits to be between £270 million and £280 million, down from the previously anticipated £285 million.
Adrian Hallmark, who became the company’s fifth chief executive in as many years this September, had already revised down financial prospects in a trading update seven weeks prior. Following the latest adjustment and news of refinancing, Hallmark stated: “We are already taking decisive actions to better position the group for the future, including a more balanced production and delivery profile in the coming quarters. These efforts will deliver enhanced operational and financial performance in 2025 and beyond. The financing we are undertaking supports our growth and provides the investment to continue with future product innovation.”
In a company statement, Aston Martin said the new financing would assist in funding its £2 billion commitment between 2023 and 2027, which includes the company’s delayed transition to electric vehicle production.
The new shares have been placed at 100p, representing a 7.3% discount to Tuesday’s closing price. Of the £110 million raised through new shares, approximately £50 million came from Yew Tree Holdings, led by Chairman Lawrence Stroll, whose stake had been reduced to 26% after previous fundraisings.
An additional £23 million was contributed by strategic investors, including Saudi Arabia’s Public Investment Fund (PIF), which previously held a 19% stake; China’s automotive group Geely, holding 18%; and technology partners Mercedes-Benz and Lucid Motors, which held 9% and 4% respectively.
Existing shareholders who did not participate in the new share issue will see their holdings diluted by about 13.5%.
According to stockbroker Jefferies, the new debt will raise Aston Martin’s total group debt to £1.47 billion, with net debt (after cash holdings) at £1.12 billion—more than four times the projected operating earnings. The annual interest expense is expected to increase to £130 million.
Philippe Houchois, an analyst at Jefferies, commented that the fundraising would help Aston Martin avoid a “zombie balance sheet,” meaning insufficient liquidity to achieve its planned £500 million operating profit next year.