British Luxury Car Maker Ashton Martin Starts New Drive To Raise Funds Before U.S. Election

British luxury carmaker Ashton Martin starts a new drive to raise funds before the U.S. Election, which is one of the largest deals of its kind in Europe this year. Read on to kno more

ZEE5 Web Desk

October 29, 2020

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4 min

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British luxury carmaker Aston Martin has started a new drive to raise funds. Aston is testing investor appetite for risky assets days before the U.S. election. More so, it is been done with ($1.1 billion) junk bond sale, one of the largest deals of its kind in Europe this year. Interestingly, the company is looking to sell dollar and sterling bonds to help redeem existing senior secured debt, repay a government-guaranteed loan and put cash on the balance sheet. The sale that began on October 29, will be closed on Friday, October 30, when Ashton Martin will announce the final price.

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The bond issue is the main tool behind a refinancing package that includes a 125-million-pound equity raise, a separate $335 million private placement of notes and an agreement that will see Mercedes-Benz lift its stake in Aston Martin to up to 22 by next three years. As per the report of upnewsinfo.com, a source familiar to the transaction admitted that there is a risk involved for investors when there’s a big part of the business plan that still needs executing. However, it’s senior secured debt with a strong brand, production facilities and a billion-pound market cap behind it, added the source. Furthermore, Steven Hunter, chief executive of high-yield analytics company 9fin mentioned that it’s unusual to see a listed business with a billion pounds of market cap offering yields at this level. He added that what’s also unusual is that it’s a company with a negative EBITDA, so it’s going to be expensive.

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According to Reuters, in the start of August, former Mercedes CEO Tobias Moers took charge of struggling Aston Martin. The British company, in a statement many on Tuesday night said it was targeting production volumes of about 10,000 vehicles, the revenue of about 2 billion pounds and adjusted core profit of 500 million pounds by its 2024 or 2025 financial years. The company sold around 5,860 vehicles last year, bringing in revenue of nearly 1 billion pounds with a core profit of 134 million pounds, added the report.

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Meanwhile, on October 27, it was announced on Twitter that Aston Martin Lagonda and Mercedes Benz AG have announced a new strategic technology agreement and enhanced partnership. The news created quite a stir among Tweeple. “Great news. I love the blend of British and German in my Vantage. Even has German paint,” read a user’s comment.

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