Aston-Martin-Bond-James-Bond
Aston Martin To Issue Bond, Share Bonds to Raise Capital Investment
Industry News
Aston Martin raised a lot of attention when it revealed the limited edition DB10 along side the launch and announcement of the new James Bond film Spectre. Undeniably the DB10 stole the show. It was all very well choreographed from a marketing perspective, but the British supercar maker also needs to raise funds to develop a new generation of models. The problem for Aston is that its owned by a group of private equity companies who rely on raising capital investment via a complex loan and repayment scheme. Most companies have debts and can service those debts, Aston Martin is a small volume manufacture that needs a big cash injection to invest in a new generation of products to replace a fabulous looking but ageing line up. In the past it had Ford to rely on but this is now 2014 and the company is relying on a group of business men who have seemingly turned the company into a specialist coach-builder as evidenced with the DB10. That’s the problem with the DB10, it won us over with the styling but needs to be on the production line and not limited to just 10 units for a film, great promotion for the Bond franchise, not so great for Aston’s future. The luxury supercar maker is loosing money and is working on a turn around plan which now involves issuing shares/bonds to raise enough finance to develop a new generation of luxury hybrid saloons and possibly SUVs. Weak investment over the last few years has seen the company slow down in comparison to its peak of 2007 when it produced 7,300 cars, last year it delivered 4,200 cars in a market place enjoying a boom in sales. Aston is said to be working on a plan to raise as much as £150 million by issuing bonds most likely offered to current shareholders. Invest Industrial and Investment Dar currently own 93 percent of shares with Daimler Benz owning 5%. Daimler’s involvement with Aston Martin is to supply the latest generation of V8 engines, Aston is currently updating existing models under a £500 million investment scheme sealed in 2012 that will see the replacement of the DB9 by 2016. Aston is being hampered by £410 million of existing debt and further still by posting a net loss of £16 million, which means it isn’t earning enough to pay its debts and this affects reinvestment. So the solution is to get into more debt and hope the company gets back into profit quickly to comfortably service the debt. Aston faces tough competition from Ferrari and the likes of Maserati and Bentley, the latter two are moving into the ultra-luxury SUV sector and this could place further strain upon Aston Martin in what is a crowed market for luxury supercars. The only stability Aston Martin has is the involvement of Daimler Benz, lets say if Aston Martin goes bankrupt, which is highly unlikely, then Daimler could well end up “picking up the pieces” for a bargain price.  Aston-Martin-Bond-James-Bond
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