Aston Martin Lands Sugar Daddy in the Form of a Canadian Billionaire
2019 was not a good year for Aston Martin’s balance sheet. As the British automaker struggled to get new product out the door, its stock decided to mimic the final plunge of the Edmund Fitzgerald. A second profit warning greeted accountants and shareholders as the New Year dawned.
As reported Friday morning, the company’s outlook is suddenly much sunnier.
A consortium led by Canadian billionaire Lawrence Stroll has agreed to buy a 16.7 percent stake in Aston Martin, pledging to increase that figure to 20 percent. Stroll, a vintage Ferrari aficionado who’s part owner of the Racing Point Formula 1 team, has a net worth of $2.6 billion.
As part of the deal, the Racing Point F1 team will become the Aston Martin F1 team starting in 2021 — and will remain so for 10 years.
The consortium includes Montreal-based billionaire businessman André Desmarais, who recently stepped down as co-CEO of Quebec holding company Power Corp. of Canada. The Aston stock buy carries a $239 million price tag.
“This follows the disappointing performance of the business through 2019 resulting in severe pressure on liquidity and exacerbated by the current high leverage,” Aston Martin said in a statement reported by Barron’s.
The automaker claimed that, due to its financial issues, development of electric models would have to hit the back burner. Investment in those products won’t occur until after 2025, the automaker stated. The news comes following reports of the death of the Rapide E electric super sedan.
In a bid to secure cash, Aston last year issued $150 million in bonds, but the move came with a steep interest rate.
Another consequence of the consortium’s stake is the demise of Aston Martin Red Bull Racing, with Aston pulling out of the four-year partnership at the end of the 2020 racing season. The two won’t split completely, however.
“Red Bull Advanced Technologies will continue to work with Aston Martin in order to deliver the Valkyrie hypercar, with the first cars scheduled for delivery at the end of the year,” Red Bull said in a statement.
News of the stock buy had an immediate impact on the automaker’s valuation. Aston Martin shares rose 21 percent in early Friday trading.
[Images: Sibuet Benjamin/Shutterstock, Aston Martin]
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- Tassos GM, especially under the sorry reign of socially promoted nobody Mary Barra (who would not have a chance in hell being appointed the CEO if she was a MALE) has done far dumber and sillier things than that, wasting BILLIONS on 'cruise' and expecting it to make it $50 billion, remember? THey do not mention the name much these days, the clowns at GM, do they?
- MaintenanceCosts I notice that the pictures don't show the dash or the door cards, two places where you'd be most likely to notice interior disintegration on a VW of this vintage.Looks nice on the outside but I wouldn't touch it.
- SilverHawk At least in the short term, this is simply going to cause more anxiety among the more technology shy consumers looking to buy a new vehicle. Especially when this is not being done for the benefit of the vehicle owner, but for the convenience of GM's marketing department. Personal data security is an extremely important issue in today's world.
- Ajla I don't think I'd be able to part with something I kept for 23 years. Especially as the only owner.
- MaintenanceCosts What now?Lack of CarPlay would be disqualifying for me, and as a current GM EV owner I was a reasonably likely future GM EV customer. Not good at all.
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