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Lawrence Stroll invests in Aston Martin

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Lawrence Stroll invests in Aston Martin

Andy Palmer, chief executive of the British manufacturer of luxury sports cars, Aston Martin, has revealed the news recently that Canadian billionaire Lawrence Stroll’s association has purchased a stake in the company.

Now, with the confirmation of investment made by Lawrence Stroll in Aston Martin, many questions and assumptions are taking the spotlight.

Why Did Lawrence Stroll Invest In Aston Martin?

Aston Martin’s luxury sports car sale had faced a significant decline since it levitated on the London Stock Exchange in October 2018. It has put the company’s shares and finance under persistent pressure, pushing it to take help.

As per BBC, the deal announced by the Aston Martin’s company says that Stroll will pay 182 million pounds for a 16.7% stake of the company. Stroll’s stake in Aston Martin will eventually rise to 20% on the accomplishment of the company’s plan to mark up a total of 500 million pounds, including a rights issue from existing stakeholders.

Yew Tree Overseas limited, Stroll’s consortium of International investors, built its stake by buying 45.6 million new ordinary Aston Martin shares on the London Stock Exchange. News is that Aston Martin raised the remaining 318 million pounds by giving present investors the chance to buy more shares. The current situation seems not a full bailout, but it is very close after the luxury car company ended its last year in severe financial crisis.

For Stroll, It’s A Long Term Investment

In a statement to shareholders, Stroll has described the move as a “significant long-term investment” and championed the firm as making the “world’s most iconic cars, designed and built by very talented people.”

According to news, Stroll has made this move with Formula One wins in mind. Stroll has agreed to buy up to 20% of Aston Martin and rename his Formula One team after the 107-year-old company famous for being fictional secret agent James Bond’s car of choice.

How Aston Martin Is Going To Change With Stroll’s Stack?

Lawrence Stroll will also replace Penny Hughes as Aston Martin’s chairman while the chief executive Andy Palmer is expected to keep his job. Several sources have also confirmed that the Racing Formula One team owned by Stroll will be rebranded after the 2020 season, and the company will need to reduce jobs and reduce costs immediately.

Hughes, Aston Martin’s chairman, also admitted in an interview that “the difficult trading performance of Aston Martin in last year has resulted in severe pressure on finance that left the company with no other option but to seek substantial additional equity financing. Without taking that help, the company’s balance sheet is not robust enough to support the group operations”.

What Are Aston Martin’s New Product Plans With Stroll On Board?

Now, Stroll’s appointment to the Aston Martin’s board results in a company’s new product plan. The new program conspicuously verified the reports declaring it a battery-powered Rapid project put on the back burner while waiting for further notice. Also, the idea to revive the Lagonda nameplate, on a series of extra luxurious electric vehicles, is also delayed until after 2025.

According to the company’s new plan, the first Aston battery-powered car was scheduled to be launched in the market by 2022, but considering the expenses required by the company to develop expensive battery technology, Aston must have to save about 10 million pounds annually for the project.

Aston will launch the Valhalla hypercar that was initially a product of a collaboration with Red Bull in 2022. Aston is also working on a new V6 engine that can be paired with a hybrid system, is also planned to be launched by the mid-2020s.

Discussing the company’s new plan, Palmer said, “Stroll, and his group has a huge experience in luxury brands and as much as anything that gives a group of mentors to not only the company but also me to work with.”

Seeing the situation of the car company, we can say that Stroll investment in Aston Martin might be just the thing the British luxury carmaker needed especially the Aston Martin F1 team, and we are happy about that because it means that Aston’s mid-engine cars are still on.

Image Credit: https://www.bmmagazine.co.uk/wp-content/uploads/2019/12/lawrence-stroll.jpg
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