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26 Jun 2020 | 07:04

Aston Martin raises equity to get through Covid-19 crisis

(Sharecast News) - Aston Martin Lagonda said it would sell new shares representing almost 20% of its existing share capital to get through the Covid-19 crisis and destocking by dealers.

The luxury carmaker said it would place the shares with investors through an accelerated bookbuild and also offer shares to the public through a retail offer. It will price the new shares based on demand in the bookbuild.

Aston Martin said it had irrevocable undertakings from investors to take up 32.8% of the new shares.

In a trading update the FTSE 250 company said trading was difficult in many markets but that the business was starting to resume more normal operation after disruption by Covid-19.

Retail sales and wholesales will be lower in the second quarter than in the first three months of the year. But Aston Martin said more than 90% of its dealer network was open with half of branches fully open. All 18 dealers in China have been open since mid-May and "early signs are positive", the company said.

Aston Martin said it would receive a £20m loan under the government's Coronavirus Large Business Interruption Loan Scheme and that plans to draw $68m of delayed draw senior secured notes at 12% coupon had exceeded the order condition. It is also in talks to secure up to £50m of trade financing.

Executive Chairman Lawrence Stroll said: "We have taken decisive action to improve the cost efficiency of the company, in alignment with reduced sports car production levels, and are focused on cost and investment control consistent with restoring profitability. Today we announce further steps to improve financial flexibility in a period of ongoing uncertainty with this additional funding to execute the business plan."

Stroll, a Canadian billionaire, took over running the business in April after making an investment in Aston Martin. Tobias Moers will join from Mercedes-AMG as chief executive in August, putting Aston Martin under new management.

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