Saudi Arabia’s sovereign wealth fund, which is de facto controlled by the country’s leader Mohammed bin Salman, is set to become the second-biggest shareholder in Aston Martin Lagonda in a fundraiser to prop up the ailing sports car brand.
The company said on Friday it wanted to raise a total of £653m.
This would be done via a rights issue to shareholders and an initial investment of £78m by the Saudi Public Investment Fund (PIF), best known in UK sporting circles for its controversial takeover of Newcastle United by Mike Ashley.
Aston said its largest shareholder, Chairman Lawrence Stroll’s Yew Tree Consortium, Mercedes-Benz and PIF would jointly invest £335m under the plan.
Shares, which had lost more than two-thirds of their value year-to-date prior to the announcement, rose 26% this morning in response to the announcement, which the company said was aimed at reducing its debt mountain.
That was last recorded at the end of March at £957m.
The new investment would keep Yew Tree’s stake at 18.3%, while Mercedes reduced its stake to 9.7% from 11.7%.
PIF, chaired by the Saudi Crown Prince Mohammed bin Salmanwould have a 16.7% stake in the company known for its connection to the James Bond film franchise.
The deal is unlikely to prove controversial in Formula One, where Aston Martin has a team, given Saudi Arabia – long criticized for its human rights record – already has a strong presence in the sport and holds a lucrative spot on the racing calendar.
It stands in stark contrast to the range that has dominated professional golf The breakaway Saudi Arabia-funded LIV series has split the sport in tworesulting in the PGA Tour and DP World Tour strengthening ties and imposing sanctions on “rebellious” players.
Continue reading: Why LIV Golf is the most controversial tournament in sport right now
PIF is not only attractive to Aston because of its money, as it also has stakes in electric car maker Lucid and McLaren, which also has a team in Formula 1.
Model electrification is seen as a priority for Aston Martin as the industry moves away from conventionally powered cars.
The company said the fundraising would also enable new investments after a series of challenges for the company since its IPO flop in 2018.
Mr Stroll, whose son Lance drives for the Aston Martin F1 Team, told investors: “Today’s announcement marks the recent achievement in Aston Martin’s development, restoring the business and balance sheet we inherited and accelerating our long-term growth potential.”
Saudi Arabian PIF backs Aston Martin in £653m fundraising | business news
Source link Saudi Arabian PIF backs Aston Martin in £653m fundraising | business news