Aston Martin stock soars after $295 million on Geely investment
(Reuters) -Aston Martin’s stock popped nearly 22% on Thursday, after the luxury carmaker announced a 234 million pound investment by China’s Geely, that will see the automotive firm become its third-largest shareholder.
Geely will acquire about 42 million ordinary shares from Chairman Lawrence Stroll’s Yew Tree, which is currently the Aston Martin’s largest stakeholder, at 335 pence apiece and subscribe for another 28 million shares at the same price.
The fresh issue will garner about 95 million pounds in cash proceeds for the British firm.
Aston Martin shares, which closed at 231.2 pence on Wednesday, were trading up to 279.4 pence at 0727 GMT.
For Aston Martin, the preferred ride of fictional secret agent James Bond which has gone bankrupt seven times in its history, the investment paves the way to secure its long-term future and allows the century-old firm to lower its debt.
They offer us a deep understanding of the key strategic growth market that China represents, as well as the opportunity to access their range of technologies and components,” Stroll said in a statement.
Geely, which owns multiple brands including British sportscar maker Lotus, Zeekr, Volvo and – via a joint venture with Volvo – Polestar, had acquired a 7.6% stake in the Formula One team sponsor in September last year.
That came after the carmaker rejected Italian investment group Investindustrial and Geely’s proposed funds of up to 1.3 billion pounds ($1.64 billion) in July.
Our decision to increase our shareholding in Aston Martin reflects our confidence in the company’s growth prospects, its technologies and its management team,” said Geely Chairman Eric Li.
The investment gives Geely a 17% stake in the company and entitles it to one board seat, behind number two shareholder Saudi Arabia’s Public Investment Fund (PIF).
($1 = 0.7923 pounds)
(Reporting by Eva Mathews in Bengaluru; Editing by Savio D’Souza, Robert Birsel)
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