Saudi Arabia’s Public Investment Fund is in talks with Aston Martin to take a stake in the business as the luxury carmaker seeks to raise additional funding for its next range of cars, according to four people .
The PIF, which already has stakes in Lucid Motors and McLaren, is in talks to take new shares in the business that could be worth £ 200 million, people said. The talks are at an early stage, they added.
Aston faces the challenge of financing its next-generation sports car and its first push into electric vehicles, at a time when the business is burdened with debt and does not produce net cash.
The company does not expect to start generating cash until 2023, and one of Aston’s top priorities is to start paying off part of its debt with high interest rates.
The group has 957 million pounds of net debt at the end of March and expects to pay about 130 million pounds in interest on debt this year.
Sales are lower than two years ago, after Aston reduced its reliance on selling wholesale models to dealers, while the company has also been slower than expected to launch its Valkyrie hypercar model . Now the business is looking for new sources of funding for its next generation of vehicles, which are key to the company’s survival.
In a stock exchange announcement shortly after the Financial Times published the news, Aston said it “regularly keeps its financing options under review.”
He added: “Any financing option, if explored and executed, would be to support and accelerate the future growth of the company.”
The group also said the negotiation is in line with expectations, with “sports cars sold out in 2023 and receipt of orders for the DBX [its luxury sport utility vehicle] more than 40 percent more than the previous year ”.
The discussions represent a reversal of the company’s publicly stated position in February, when president and owner Lawrence Stroll insisted the business did not need additional funding.
“Let me be clear, in black and white: we don’t need money,” he said then.
Aston’s latest fundraising talks were first reported by Autocar magazine. Aston shares fell 18 percent on Thursday, after the Autocar report, before recovering later in the day to 435.4 p., 9 percent lower.
Aston Martin declined to comment beyond its IPO. The PIF did not respond to a request for comment.
Aston already has a relationship with the kingdom, following an agreement with Aramco to change the name of the F1 team.
Stroll, which invested in the company in January 2020, has tried to orchestrate a turnaround in the business, emptying excess car showrooms and trying to readjust supply with genuine customer demand to help rebuild luxury brand credentials.
Last month, Stroll revealed that Aston rejected an Audi approach to his Formula One team’s entry into the sport from 2026. Stroll, whose son Lance runs on the team, said to analysts last month who was “very happy with our relationship with Mercedes.”
Toto Wolff, director of the Mercedes team, told FT last month that the brand could cut one of its three F1 engine customers, one of which is Aston, due to the new rules.
Two people said Audi was still in talks with Aston, though not about a stake in the capital.
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Any investment by an existing carmaker would be complicated by Aston’s relationship with Mercedes-Benz, which owns one-fifth of the carmaker’s shares and a technology deal to supply engines and other systems to Aston.
Last month, Aston appointed former Ferrari chief Amedeo Felisa as the new CEO, replacing former Mercedes director Tobias Moers. The replacement makes Felisa Aston the third CEO in two years.
Additional report by Joe Miller in Frankfurt