Aston Martin Lagonda Global Holdings Plc plans a sale of shares as part of a slew of moves to shore up a balance sheet damaged by the coronavirus.
The sale of almost 20% of its current equity comes on top of discussions to secure trade financing, the British carmaker said in a statement Friday. The shares dropped in London trading, for a year-to-date decline of 66% and market value of 869 million pounds ($1 billion).
Aston Martin is counting on investors to buy into signs of a recovery in the battered auto industry and a new chief executive recruited from rival sports-car maker Mercedes-AMG. Almost all showrooms have now reopened, and Aston Martin’s factory in Wales building the new DBX has successfully started production. Still, the company predicted lower sales in the second quarter versus the prior period.
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“We have taken decisive action to improve the cost efficiency of the company," Chairman Lawrence Stroll, a billionaire Canadian backer, said in the release.
Aston Martin is looking to tap multiple sources of funding after losing money. In addition to the talks for 50 million pounds in trade financing, it secured a coronavirus-support loan of 20 million pounds and is drawing down $68 million of further funding through secured notes due 2022.
Like other car companies, Aston Martin sales suffered as car showrooms and factories closed across Europe from March. The company was already in a tough financial spot before the virus hit, and will be hoping to finally make progress with its turnaround plan under Stroll as Europe begins to reopen.
(Also read: Aston Martin to shed up to 500 jobs in cost cutting drive)
The company said only 10 of its dealers, mainly in India and South America, remain closed. All 18 in China have been open since mid-May and early indications are positive on sales and market share.
This story has been published from a wire agency feed without modifications to the text.