Aston Martin is shifting gears with a major financial boost. It is struggling with losses and tariffs and is taking new financing from its chairman while disposing of some of its stake in Formula One. What's the aim? To ride out the tough times and gain financial health.
The luxury car manufacturer has received a $162 million funding injection to cover mounting losses and Trump tariffs.
Yew Tree Consortium, chaired by Lawrence Stroll, is taking a greater stake as the company sells a part of its Formula One team. In spite of the setbacks, Aston Martin is sticking to long-term profitability.
By 09:30 GMT on Monday, shares of the company that is well-known for being the preferred vehicle of fictional secret agent James Bond had risen 11.8% to 72.95 pence, as per a report by Reuters.
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The company had to lay off 5% of its employees last month due to delivery delays and low demand in China, which have plagued it in recent years.
A further 52.5 million pounds will be invested by Stroll's Yew Tree Consortium, which will buy 75 million shares at a price of 70 pence each. His stake will increase from 27.7% to roughly 33%, with the potential to reach 35%, as quoted in a report by Reuters.
A rule requiring an entity that owns more than 30% of a UK-listed company to offer to buy out the remaining shareholders will be waived in the case of Yew Tree.
Although exemptions have been given in the past, Russ Mould, investment director at AJ Bell, stated that a takeover would be a better course of action because it would allow the automaker to pursue a turnaround strategy out of the public eye.
Instead of predicting mid-single-digit percentage growth in annual car volumes, the company now forecasts "modest growth" due to the Trump administration's tariff on imported vehicles.
Last year, over one-third of Aston Martin's revenue came from the United States.
The company is facing financial losses, delivery delays, and low demand in China, prompting another funding round.
Will Donald Trump's tariffs harm Aston Martin's US sales?
Yes, tariffs on imported vehicles are expected to slow car volume growth, as the United States accounts for more than one-third of total revenue.
The luxury car manufacturer has received a $162 million funding injection to cover mounting losses and Trump tariffs.
Yew Tree Consortium, chaired by Lawrence Stroll, is taking a greater stake as the company sells a part of its Formula One team. In spite of the setbacks, Aston Martin is sticking to long-term profitability.
Why does Aston Martin need more funding?
As it fights growing losses and tariffs imposed by U.S. President Donald Trump, Aston Martin will raise more than 125 million pounds ($161.9 million) through funding from its chairman and the sale of its stake in his Formula One team.By 09:30 GMT on Monday, shares of the company that is well-known for being the preferred vehicle of fictional secret agent James Bond had risen 11.8% to 72.95 pence, as per a report by Reuters.
ALSO READ: David Beckham’s former assistant Rebecca Loos doubles down on affair claims with the ace footballer, says she stuck to the truth for 20 years
How much is Lawrence Stroll investing?
Since Chairman Lawrence Stroll arrived in 2020 and invested approximately 600 million pounds in the luxury automaker, Aston Martin has raised its equity seven times.The company had to lay off 5% of its employees last month due to delivery delays and low demand in China, which have plagued it in recent years.
A further 52.5 million pounds will be invested by Stroll's Yew Tree Consortium, which will buy 75 million shares at a price of 70 pence each. His stake will increase from 27.7% to roughly 33%, with the potential to reach 35%, as quoted in a report by Reuters.
A rule requiring an entity that owns more than 30% of a UK-listed company to offer to buy out the remaining shareholders will be waived in the case of Yew Tree.
Although exemptions have been given in the past, Russ Mould, investment director at AJ Bell, stated that a takeover would be a better course of action because it would allow the automaker to pursue a turnaround strategy out of the public eye.
What impact do Donald Trump’s tariffs have on Aston Martin?
According to the automaker, the sale of a portion of the Aston Martin Aramco Formula One team will enable the business to realize a premium over its current book value of roughly 74 million pounds. However, the sale will not impact an ongoing long-term sponsorship agreement.Instead of predicting mid-single-digit percentage growth in annual car volumes, the company now forecasts "modest growth" due to the Trump administration's tariff on imported vehicles.
Last year, over one-third of Aston Martin's revenue came from the United States.
FAQs
Why is Aston Martin raising more money?The company is facing financial losses, delivery delays, and low demand in China, prompting another funding round.
Will Donald Trump's tariffs harm Aston Martin's US sales?
Yes, tariffs on imported vehicles are expected to slow car volume growth, as the United States accounts for more than one-third of total revenue.
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