Saudi Arabia's sovereign wealth fund takes 16.75% stake in Aston Martin

16/07/2022
NEWS STORY

78m ($92m) investment sees Saudi Arabia's Public Investment Fund (PIF) become Aston Martin's second largest shareholder.

The Saudi money, together with a 575m ($682m) rights issue, is intended to lower the company's debt whilst providing it with a "war chest" amidst a "challenging operating environment", whilst also allowing it to develop new cars.

PIF, which is controlled by Crown Prince Mohammed bin Salman, and last year took over Newcastle United football club, has invested in a wide range of companies, not least Boeing, Facebook, Uber, Disney and even a 5.7% stake (valued at $500 million) in Live Nation, the entertainment company 36.2% owned by Liberty Media.

The move, which saw a 1.3bn proposal from Italian investment group Investindustrial and Chinese car manufacturer Geely rejected, will see Lawrence Stroll's stake in Aston Martin reduced to 18.3% and Mercedes-Benz's to 9.7%.

"This is a game-changing event for Aston Martin," said Stroll, "supporting the delivery of our strategic plans and accelerating our long-term growth potential."

Indeed, news of the move saw shares rise 23.7 per cent.

"In 2020, I inherited a business in deep trouble that needed to be reset," said Stroll, who claimed that the Investindustrial/Geely proposal, other than being a potential takeover, would have been highly dilutive to shareholders.

Revealing that around half of the new capital will be used to repay outstanding debts of 957m - as at the end of March - Stroll admitted that the date at which the company will start producing cash has been delayed until 2024 as opposed to 2023.

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Published: 16/07/2022
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