Luxury carmaker Aston Martin is set to raise more than £125million through new funding from its chairman and the sale of its stake in his Formula One team in a bid to prepare for Donald Trump's harsh tariffs.
The company's shares surged 11.8 per cent to 72.95 pence by Monday morning following the announcement, Reuters reported.
This latest equity raise marks Aston Martin's seventh since Chairman Lawrence Stroll arrived in 2020.
Stroll has already invested approximately £600million in the iconic British manufacturer, famous for being fictional secret agent James Bond's car of choice.
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Aston Martin could be hammered by President Donald Trump's new tariffs
PA/REUTERS
The funding comes as Aston Martin battles mounting financial challenges that have plagued the company in recent years.
Stroll's Yew Tree Consortium will invest a further £52.5million by purchasing 75 million shares at 70 pence per share.
This investment will increase his stake in the company from 27.7 per cent to about 33 per cent, with the possibility of rising further to 35 per cent.
Yew Tree will seek a waiver from rules requiring entities owning more than 30% of a UK-listed company to make an offer to buy out remaining shareholders.
"Exemptions have been granted in the past, yet it feels like a takeover would be a better outcome as it would mean the car company would be free to pursue a turnaround strategy out of the public spotlight," said Russ Mould, investment director at AJ Bell.
The luxury carmaker has been struggling with delivery delays and depressed demand in China, forcing the brand to cut five per cent of its workforce last month.
The company is also facing new 25 per cent tariffs imposed by US President Donald Trump on imported vehicles.
The United States contributed more than a third of Aston Martin's revenue last year, making the new tariffs particularly significant.
Due to the Trump administration's tariffs, Aston Martin has revised its annual forecast to "modest growth" in car volumes.
This is a downgrade from its previous expectation of mid-single-digit percentage growth. The company is still reviewing the full impact of the new levies on its business.
The sale of its stake in the Aston Martin Aramco Formula One team will help the company realise a premium to the current book value of about £74 million.
This sale will not affect an existing long-term sponsorship deal, the carmaker confirmed.
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Aston Martin Lawrence Stroll aims to have a 35 per cent stake in the brand
PA
Despite these challenges, Aston Martin has maintained its target of achieving positive operating earnings in 2025.
The luxury carmaker also expects to become free cash flow positive in the second half of that year.
These financial targets suggest the company remains confident in its long-term recovery strategy, even as it navigates immediate economic headwinds.
