Aston Martin has asked a billionaire investor for another GBP20m in emergency funding after the coronavirus outbreak triggered a sales slump, piling further pressure on the struggling carmaker's finances.
According to The Guardian newspaper, Lawrence Stroll, who led a rescue deal in January, agreed to inject the sum in short term funding, on top of GBP55.5m previously announced, as Aston Martin battles stock market turmoil while trying to stave off a cash crunch.
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The paper said the rescue deal was agreed in January saving the British sportscar maker from imminent collapse. A large debt pile had threatened to cause it to go bust for the eighth time in 107 years.
However, the paper added, the coronavirus outbreak had caused Aston Martin's share price to fall to GBP2.06 per share, far below the GBP4 price previously planned for the emergency share issue.
Sales have plunged in China and the wider Asian market, and could fall elsewhere, the company said.
Under the new deal, Stroll and his consortium partners will receive 25% of the company in return for GBP171m – at a price of GBP2.25 per share – alongside the short-term capital injection. The consortium had previously agreed to pay GBP182m for 16.7% of the company.
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By GlobalDataIn total the carmaker will receive GBP536m from the consortium and other investors, up from the GBP500m announced in January.
According to The Guardian, Aston Martin has lost more than 60% of its market value since the start of 2020 and is now worth only a tenth of its value when it floated on the stock market in October 2018, at a price of GBP19 per share.
The coronavirus outbreak has disrupted marketing efforts at a time when sales were already waning.
The cancellation of the Geneva motor show forced it to launch new models via a YouTube video, while the postponement of the new James Bond film has also denied it a sales boost.
Chief executive Andy Palmer said the company had not yet experienced production disruptions despite some parts shortages – including for its make-or-break new SUV, the DBX, The Guardian added.
However, the paper cautioned, analysts fear an extended downturn in sales in the UK, Europe and the US could add further cash pressures on the company, which is heavily invested in the new model launch.
Stroll said: "While the immediate outlook looks increasingly challenging, I remain fully committed to the future of the Aston Martin Lagonda and look forward to implementing our plans once the fundraising is complete."
