Saudi Arabia’s sovereign wealth fund will be the second largest shareholder of Aston Martin (AML.L. ), with nearly 17% ownership in a capital raise that aims to pay off debt and strengthen its business, the British luxury carmaker announced on Friday.
- Aston Martin shares are up by 21.41% (15 Jul, 10:04 BST)
- Mercedes, Yew Tree to cut stake
- Separate rights issue of 575 mln pounds
Faced with high debt, a steep stock fall, and a struggling Formula One Team, the company announced it would raise 653million pounds ($773.15million) through PIF’s 78 million pound capital and separate rights issues of 575 million pounds.
Aston Martin revealed that it has rejected a £1.3bn investment offer from a group of backers, including Chinese car manufacturer Geely.
According to the luxury car manufacturer, Geely and European group Investindutrial had “markedly overestimated”, their new funding needs. This would have severely diluted existing shareholders and made it difficult to execute.
Geely owns a stake in Volvo and produces electric vehicles through brands such as Polestar.
Aston announced plans to raise £653m, including investors such as the sovereign wealth fund of Saudi Arabia.
The Public Investment Fund will hold a 17.5% stake in the company. The Yew Tree Consortium chairman Lawrence Stroll and Mercedes-Benz also provide funding.
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