Aston Martin, the British sports car maker, has agreed to a change of management with a $655 million injection, partly from a consortium led by Canadian billionaire Lawrence Stroll.
The brand's cars are driven by fictional spy James Bond, but its struggles in 2019 were very real. (Credit: AFP)
The brand, which has gained fame for its use in the James Bond movie franchise, will also end its partnership with the Red Bull Racing Formula One team and instead become title sponsor of Racing Point from 2021. The team, which was known as Force India until it was bought by Stroll in 2018, will be renamed Aston Martin Racing. The initial deal is for a 10-year partnership.
Stroll and his partners, including Lord Anthony Bamford (chairman of JCB) and Silas Chou, will invest $238 million into the struggling motor company for a 16.7 percent stake. Stroll will also become executive chairman and a board member.
The remaining $417 million will come from a "rights issue" for shareholders to buy additional securities (such as equity and shares) in the firm.
The 45.6 million new shares will be sold to the consortium at £4.00 ($5.25) – which is a steep reduction from the ($24.92) asking price during the October 2019 IPO, which is regarded as a failure and was blamed on poor sales over the past year.
The poor sales are also the reason for this large investment from Stroll and partners.
"The difficult trading performance in 2019 resulted in severe pressure on liquidity, which has left the company with no alternative but to seek substantial additional equity financing," now-former chair of the board Penny Hughes said in a statement.
Andy Palmer, who will remain group CEO, added: "We are focused on turning around performance, restoring price positioning and delivering a more efficient operational footprint. We will deliver some exciting new products this year with the much-anticipated DBX during Q2, Vantage Roadster in the spring and Aston Martin Valkyrie deliveries starting in H2."
The firm previously announced it would attempt to cut its operational budget by $13 million, and confirmed on Friday that restructuring will take place, along with "efficiencies in manufacturing."