Aston Martin turns to stock offering to bolster capital

LONDON — Aston Martin said it would issue new shares worth up to 20 percent of its existing equity capital for proceeds of 152 million pounds ($188.37 million) as the automaker seeks additional funds to ride out the coronavirus,
New owner Yew Tree will pick up 25 percent of the offering, with Prestige Motors, which has steadily reduced its holding in the company having previously been the main shareholder, planning to buy about 8 percent, the company said on Friday.
The company said the pacing consisted of 304 million new shares at a price of 50 pence a piece, a 20 percent discount to the stock’s closing price on Thursday.
Shares tanked 18 percent to 51.6 pence by 1130 GMT, set for their worst one-day drop since March.
Aston Martin, which in May posted a deep first-quarter loss after sales dropped by nearly a third, also said its sales are expected to fall further in the second quarter compared with the first.
The company has been cutting jobs and streamlining its operations as it seeks to bring its cost base in line with its move to reduce sports car production levels.
“We are making very good progress on my first priority, the rebalancing of supply and demand and reducing dealer stock as we reset the business and restore exclusivity,” said Chairman Lawrence Stroll, the Canadian billionaire who took over the role earlier this year after taking a 20 percent stake in the company.
Aston Martin also said it had received approval for a loan of 20 million pounds ($24.83 million) from the UK’s  Coronavirus Large Business Interruption Loan Scheme (CLBILS).
The company has been plagued with the coronavirus crisis, much like other carmakers, with lockdown to prevent the spread of the disease leading to a 97 percent annual plunge in British new car sales in April to the lowest level of any month since February 1946.
As part of a turnaround, the company is reshuffling its management with the appointment of Tobias Moers, a former AMG boss, as CEO and Kenneth Gregor, a former finance chief at Jaguar Land Rover, as its new chief financial officer.
Source: autonewscom