Aston Martin’s Fiscal Dilemma

22 July 2022

The future of Aston Martin – which has been on the verge of bankruptcy eight times in its tumultuous 109-year history is being boosted by a massive new Saudi investment.

Earlier this year, Tobias Moers, Aston’s CEO, left hurriedly; soon after, Aston Martin made a pre-tax loss of £111.6m in 2022’s first quarter versus a loss of £42.2m in 2021. Now Aston Martin has announced a £653 million investment with Saudi Arabia as a significant investor.

Following a relatively complex financial structure, the Saudi investment effectively dilutes the holding of the biggest shareholder, Mr Lawrence Stroll, to 18.3percent, Mercedes-Benz, 10 per cent and the Saudi Arabia Public Investment Fund to 16.3 per cent and two places on the board.

And remember, it was only a few months past that Mr Stroll insisted that Aston Martin did not require external financing. Now Mr Stroll has said, ‘this marks the latest success in the evolution of Aston Martin, the restoration of the business and balance sheet we inherited, and the acceleration of our long-term growth potential.’

‘It transforms our balance sheet, liquidity and cash flow profile and provides greater clarity on our pathway to become sustainably free cash flow positive and create significant shareholder value.’

Also, a small caveat, Aston Martin now expects to start making money in 2024 rather than next year.

Aston has also rejected a £1.3bn investment proposal from Geely/ Investindustrial consortium.

And so continues the story of Aston Martin.