By on January 31, 2020

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.

aston martin

“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.

https://twitter.com/redbullracing/status/1223161442905546752

“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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10 Comments on “Aston Martin Lands Sugar Daddy in the Form of a Canadian Billionaire...”


  • avatar
    dividebytube

    How do you make a million dollars in the auto industry?

    First start with a billion dollars…

    • 0 avatar
      PeriSoft

      That said, this might not be a bad time to get in to Aston. Their crossover is likely to print money, and with Stroll angling on increasing his involvement in F1, he’ll likely view the investment as a win even if the value of Aston’s stock stagnates.

  • avatar
    phxmotor

    Love AM. But can anyone hear that strange music? Ahhh due bee leeve it’s the swan song.

  • avatar
    Lou_BC

    They need to start manufacturing pickup trucks.

  • avatar
    redapple

    Lance Stroll F 1 driver.

    ?

    Oh. Thats how he got there. Got it.

  • avatar
    Add Lightness

    I could never figure out how AM gets plastered all over Red Bull F1.
    Is AM paying RB or does RB have a piece of AM and is trying to up AM’s value? All this with a strong Renault now Honda relationship.
    I would have thought the RB engine providers would not want another brand’s name involved.
    Can’t see AM providing any significant F1 level technology.

  • avatar
    Garrett

    Having a “works” team is a smart move. Good for their profile.

    Hopefully this means a better livery for the F1 cars. Not a fan of the pink Racing Point cars.

  • avatar

    I got about AM but how about FM and HD?

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