Canadian billionaire Lawrence Stroll is emerging as the front-runner to buy a stake in Aston Martin as interest from a rival Chinese investor wanes, people with knowledge of the matter said.
Zhejiang Geely Holding Group, the automaker backed by Chinese tycoon Li Shufu, is cooling on the idea of a deal with Aston Martin after holding some preliminary talks, the people said, asking not to be identified because the information is private.
Stroll has been discussing a potential investment of about 200 million pounds, Bloomberg News reported earlier. Aston Martin spoke to several investors about a potential capital increase as it makes a final effort to bring in fresh funding, the people said at the time.
Geely already controls Sweden’s Volvo Cars and Britain’s Lotus Cars and has a minority stake in Daimler. It was examining Aston Martin primarily to find a technology-sharing deal to benefit businesses such as Lotus.
Aston Martin needs at least 400 million pounds of fresh equity to keep funding its critical products, Jefferies Financial Group said in note to clients earlier this month.
No final agreements have been reached, and the carmaker could fail to reach an agreement or decide against bringing in new investors, sources said.
Aston Martin has been battered by an industry downturn, uncertainty around Brexit and a lukewarm response to some models. Weaker-than-expected sales have forced the carmaker to scale back its sales volume targets.
It is set to begin deliveries this year for the new DBX sports-utility vehicle that has turned into a make-or-break product for the company. The $189,000 DBX sits at the heart of plans to more than double annual output to 14,000 autos by 2023.
Raising fresh funds could help with the rollout of the SUV as well as lower debt levels.
Representatives for Aston Martin and Geely declined to comment, while a representative for Stroll couldn’t immediately be reached for comment.