Canadian billionaire Lawrence Stroll will increase his stake in Aston Martin after the company’s shares have tanked due to the ongoing coronavirus.
In January, an investment fund led by Stroll agreed to purchase a 16.7 per cent stake in the British car manufacturer for £182 million ($225 million) at £4 ($4.97) a share. Additionally, the deal included a £318 million ($394 million) cash infusion.
With Aston Martin’s share price continuing to fall, Stroll will up his stake. According to Autocar, a reworked agreement between Stroll and Aston Martin will be worth a total of £536 million ($665 million) with the investment fund to take a 25 per cent stake in the company at a value of £2.25 ($2.79) per share. The investment fund, named Yew Tree, will also provide £75.5 million ($93.7 million) in short-term working capital support to ensure Aston Martin has the liquidity it’ll need to meet a revised investment timetable.
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“There has been a significant change in the global market environment in which Aston Martin Lagonda operates,” Lawrence Stroll said. “What has not changed is our commitment to provide the Company with the necessary funding it needs to manage through this period, to reset the business and to deliver on its long-term potential”, he added.
Alongside the announcement of the new deal, Aston Martin said it is proactively managing its supply chain and business as the coronavirus worsens. It has put public health safety measures in place to protect its staff and says that it has secured supply to keep production at normal levels until at least early April.
“We are actively managing the potential impacts of COVID-19 on a daily basis, most particularly in our tier 2 supply chain, with no disruption to production to date and are mindful of the ongoing uncertainties and risks to the business,” Aston Martin chief executive Andy Palmer said.
“The first two months of the year were planned to be our smallest in wholesale unit terms, as we start to rebalance supply and demand; a key component of our plan to turn around performance and restore our price positioning. Trading has generally been in line with these conservative expectations, with retail performance slightly better than planned”, the executive added.