Aston Martin, the iconic British luxury carmaker, has successfully raised £135 million through a debt placement to reinforce its financial position and support its ambitious production ramp-up plans.
The company’s decision to secure additional funding comes as it prepares to launch several highly anticipated models in the latter half of the year.
The newly acquired financing comprises 10% senior secured notes amounting to approximately $90 million (£70.7 million) and an additional £65 million in 10.4% senior secured notes, both set to mature in 2029. Aston Martin intends to utilise the net proceeds from this offering to repay borrowings under its existing super senior revolving credit facility, thereby strengthening its balance sheet.
The British automaker has grappled with a substantial debt burden since its initial public offering in 2018. Lawrence Stroll, the billionaire chair of Aston Martin, has previously sought financial support from the company’s backers, including Chinese carmaker Geely, to address this issue.
In March of this year, Aston Martin successfully completed a £1.15 billion refinancing exercise to solidify its financial standing. This move was particularly crucial as the company reported widening losses during the first half of the year, just before the eagerly awaited launch of several new models scheduled for the second half.
Doug Lafferty, Aston Martin’s Chief Financial Officer, expressed satisfaction with the positive progress made by the company thus far in 2024. He highlighted the ongoing execution of Aston Martin’s extensive product transformation, which is expected to drive volume growth and generate sustainable positive free cash flow later in the year.
Lafferty also noted the encouraging demand from the company’s existing bondholders following the release of its first-half 2024 results. The successful pricing of the £135 million equivalent private placement, along with the refinancing completed in March 2024, provides Aston Martin with the necessary liquidity to navigate an exciting second half of the year.
Despite the announcement, Aston Martin’s shares experienced a slight dip of just over one per cent in early morning trading on Friday, as investors digested the news of the additional debt.
As Aston Martin continues to execute its turnaround strategy and prepares for the launch of its new models, the company remains focused on strengthening its financial position and delivering on its promise of an exhilarating product lineup. The success of these upcoming launches will be crucial in determining the luxury carmaker’s ability to generate sustainable growth and profitability in the long term.
