Aston Martin Lagonda Global Holdings Plc shares plunged as much as 14% after the British manufacturer announced that it’s firming up a capital raise enabling new and existing investors to buy the stock at a steep discount.
(Bloomberg) — Aston Martin Lagonda Global Holdings Plc shares plunged as much as 14% after the British manufacturer announced that it’s firming up a capital raise enabling new and existing investors to buy the stock at a steep discount.
The 4-for-1 rights issue first announced in July will raise gross proceeds of about £575.8 million ($662 million). The issue price of 103 pence per new share represents a 78.5% discount to Aston Martin’s Sept. 2 closing price, the luxury-car maker said in a statement.
Aston Martin shares fell 13% to 419.10 pence as of 10:45 a.m. Monday in London trading. The stock has dropped about 69% this year.
Aston Martin has secured commitments from Saudi Arabia’s Public Investment Fund, a consortium led by Chairman Lawrence Stroll, and Mercedes-Benz AG for the rights issue. The Gaydon, England-based company said in July it had considered and rejected a £1.3 billion equity investment proposal from private equity firm Investindustrial Group Holdings and Geely International Ltd., saying it believed their offer overestimated the company’s capital requirements, and that it would have heavily diluted existing shareholders and been difficult to execute.
“Aston Martin’s fundamentals remain shaky with or without the capital raise,” Victoria Scholar, head of investment at Interactive Investor, said in a note. “Aston Martin may be better off accepting a takeover off with the cheap share price and the slump in the pound arguably providing an attractive opportunity for an international automaker. Aston Martin already rejected an offer from Chinese carmaker Geely, which in hindsight could have been a mistake.”
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