Aston Martin Lagonda (AML) shares jumped by more than a fifth as the company announced a “substantial investment” by Chinese car maker Geely (HK:175).
Geely has bought almost 42mn shares from executive chairman Lawrence Stroll’s consortium and will subscribe to 28.3mn new shares at 335p a share – a 45 per cent premium to Wednesday's closing price of 231p. The new shares equate to around 4 per cent of the enlarged company and provide it with a cash injection of £95mn.
Geely will become Aston Martin’s third-biggest shareholder with a 17 per cent stake, behind Stroll’s Yew Tree Consortium (which will hold 21 per cent) and Saudi Arabia’s Public Investment Fund (18 per cent). It will have a right to appoint one board director, and a second representative as an observer.
Stroll said Geely’s investment offered a “deep understanding" of the growing Chinese market and an opportunity to "access its range of technologies and components”.
The cash will also come in handy. Geely first invested in Aston Martin during last year’s £653mn fundraise, through which Saudi Arabia’s PIF became the company’s second-biggest shareholder.
Geely chairman, Eric Li, said the latest investment reflected "our confidence in the [Aston's] growth prospects”.
Aston Martin’s debt pile stood at £868mn at the end of March.
