After buying the Force India Formula 1 team in 2018 and rebranding it to Racing Point, Canadian billionaire Lawrence Stroll has now bought a major stake in Aston Martin after investing a total of £500 million (Php 33.4 billion). Specifically, Stroll and his group of investors, have secured a 16.7% share in the British carmaker by paying around £182 million (Php 12.1 billion).
As a result of the deal, Lawrence Stroll will be joining the Aston Martin board as executive chairman. Meanwhile, Andy Palmer will stay on as CEO. Furthermore, the British marque will raise the remaining £318 million (Php 21.2 billion) through the issue of new shares to be bought by Stroll’s group.
The investment comes as a relief for Aston Martin following the company’s rough performance for the past few years. The proceeds of the investment will be used to “improve liquidity and reduce leverage”. More importantly, it will allow the brand to ramp up production of its first-ever crossover – the DBX. The DBX is expected to help turnaround the company’s performance and will arrive in Q2 2020.
“As we announced on 7 January 2020, the past year has been a regrettably disappointing and challenging time for the Company. Despite our continued efforts, the difficult trading conditions and resulting in poor performance in 2019 have put the company in a stressed position with severe pressure on liquidity and affected our ability to deliver against our original plan. Today’s fundraising is necessary and provides a platform to support the long-term future of the Company,” said Dr. Andy Palmer, Aston Martin CEO.
At the same time, the company also pledged to launch the Valkyrie hypercar this year and committed to a revised mid-engined car strategy. This means we’ll get to see more mid-engine Aston Martin sports cars in the coming years including the Vanquish and Valhalla. While there will be more mid-engine Astons coming, investment in electric vehicles including the re-launching of the premium Lagonda brand has been delayed beyond 2025. As such, the electric RapidE project has been on hold pending a review.
It’s no surprise that the automaker will undergo personnel changes and some cost-cutting as well. Specifically, the automaker hopes to save around £10 million (Php 668 million) annually. In fact, the British marque already issued a press release appointing new heads for its technical, sales, and marketing department.
“Mr. Stroll brings strong and proven expertise in both automotive and luxury brands more widely which we believe will be of significant benefit to Aston Martin Lagonda,” added Palmer.
As part of the deal, Aston Martin will be entering Formula 1 in the 2021 season. They won’t be a new team though. Instead, the current Racing Point F1 team will be renamed as the Aston Martin F1 works team. For the 2020 season, however, Aston Martin will continue to sponsor the Red Bull F1 team.
With the fresh injection of funds and new management plans, we hope Aston Martin can recover from the low sales it has been experiencing as of late.