Aston Martin shares rose after Executive Chairman Lawrence Stroll confirmed the money-losing British luxury automaker is negotiating with bankers to address a looming debt pile of roughly $1.4 billion.
Talks are set to focus on a $1.1 billion bond that is maturing in November next year.
Its 10.5 percent coupon puts the company on the hook for payments of $120 million annually.
“We are currently studying with our bankers the most appropriate actions of how to deal with it,” Stroll said in an interview with Bloomberg Television.
“Obviously it will be addressed in the most appropriate manner possible and in the best interests of the company and its shareholders.”
Shares rose as much as 2.2 percent in early Tuesday trading in London as investors welcomed talks to tackle its debt pile.
Aston Martin has raised money a number of times, including from new major shareholders. It is seeking to refinance at a tumultuous time in debt markets amid uncertainty around rate cuts.
Kerrigan Advisors’ proprietary annual OEM Survey of over 100 executives reveals that the majority of respondents are worried about the financial impact of Chinese automakers’ growing global market share, and most expect that the EV transition to be slower than expected. The survey also queried executives on their outlooks for dealership valuations and profitability, as well as their expectations for the future of dealer networks and facility requirements.
Stroll, a Canadian billionaire, rescued the manufacturer in 2020.
The business has perennially struggled with cash and roped in Saudi Arabia’s Public Investment Fund in 2022 as part of Stroll’s turnaround efforts and pivot to battery-powered sports cars.
Analysts in the past have said that Aston Martin’s lack of scale and precarious cash balance made it vulnerable.
Last year, China’s Geely became its third-biggest shareholder alongside EV maker Lucid Group, where Saudi Arabia’s PIF holds a majority.
As well as the $1.1 billion bond, Aston Martin also has a revolving credit facility of 79 million pound ($99.8 million) that is due next year and a $121 million note to be repaid in 2026, data compiled by Bloomberg shows.
Aston Martin faces the “daunting task of generating an operating profit for the first time in six years while considering alternatives to restructure its highly leveraged balance sheet,” Bloomberg Intelligence analyst Joel Levington said in a note.
The maker of the Valkyrie supercar could also deepen its ties with Geely’s multi-brand stable that includes premium EV maker Polestar and former British sports-car brand Lotus, Levington said.
The company warned in November that it expects to ship fewer vehicles than previously forecast for the full year, after supply-chain issues hampered the rollout of its new DB12 sports car.
It’s set to report full-year earnings on Feb. 28.
Asked about analyst comments that Aston Martin could be vulnerable to a takeover bid from its new holders, Stroll said the company was “not in any M&A territory.”
The 64-year-old textiles tycoon, who made his money investing in fashion labels including Pierre Cardin, Ralph Lauren and Tommy Hilfiger, has previously acknowledged that the turnaround job was more challenging than he expected.
Still, it’s only a start, he said, adding that he planned to remain at the company “for many, many years.”
New CEO
Last week, Bloomberg News reported that Aston Martin was sounding out potential candidates to become its fourth CEO in as many years.
The current chief, former Ferrari boss Amedeo Felisa, 77, has been in the role for less than two years. Stroll declined to comment on the report.
The Gaydon, England-based company on Monday revealed its new Vantage sports car, part of his effort to launch new models more frequently than the company has done in the past.
Stroll is also hoping to capitalize on the growing interest in Formula One, having returned to the competition in 2021.
Late last year, he sold off a minority stake in the team that is separate from the listed company to U.S. private equity firm Arctos Partners, at a valuation of around 1 billion pounds.
