Aston Martin gains capital injection and strengthens link with Mercedes

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  • Shares in the company jumped as much as 12.8 percent after it said late on Tuesday

LONDON: Aston Martin鈥檚 125 million pound ($163 million) capital increase has been fully subscribed, the loss-making carmaker said on Wednesday as it seeks to turn round the business with additional support from Daimler.

Shares in the company jumped as much as 12.8 percent after it said late on Tuesday that Daimler鈥檚 Mercedes-Benz would lift its stake in the British carmaker to up to 20 percent by 2023.

Mercedes will not put up any cash but will be given the shares in exchange for expanding an existing supply agreement, allowing Aston Martin to access key Mercedes technology, including hybrid and electric drive systems.

The German carmaker, which already had a 2.6 percent holding in Aston Martin, said the deepened partnership would result in further sales of its components and systems, as well as the potential upside of any increase in the value of the stake.

Former Mercedes CEO Tobias Moers took charge of struggling Aston Martin at the start of August.

In Tuesday night鈥檚 statement, the British company said it was targeting production volumes of about 10,000 vehicles, revenue of about 拢2 billion and adjusted core profit of 拢500 million by its 2024 or 2025 financial years.

The company sold around 5,860 vehicles last year, bringing in revenue of nearly 拢1 billion with core profit of 拢134 million.

鈥淲ith a strong industrial partner in Mercedes, it has a decent chance at success. And if it does succeed, maybe it will create some value for Daimler shareholders too,鈥� Bernstein analysts said in a note.

Aston Martin, known for being James Bond鈥檚 carmaker of choice, has suffered a torrid time since it floated two years ago, with its shares losing two thirds of their value this year.

A consortium led by Canadian billionaire and Formula One team owner Lawrence Stroll became the largest investor in the company in January.