Billionaire Stroll Becomes Frontrunner for Aston Martin Stake
(Bloomberg) -- Shares of luxury carmaker Aston Martin Lagonda Global Holdings Plc declined Friday, after people familiar with the matter said there’s waning interest from a potential Chinese investor to buy a stake.
Zhejiang Geely Holding Group Co., the automaker backed by Chinese tycoon Li Shufu, is cooling on the idea of a deal with Aston Martin after holding some preliminary talks, the people said. Aston Martin shares fell 6.6% in Friday afternoon trading, valuing the firm at 1.04 billion pounds ($1.35 billion), after earlier dropping as much as 7.4%.
Canadian billionaire Lawrence Stroll is emerging as the frontrunner to buy a stake in British manufacturer, according to the people, who asked not to be identified because the information is private. Aston Martin could decide on its plan of action as early as this month, the people said.
Stroll has been discussing a potential investment of about 200 million pounds, Bloomberg News reported earlier. Aston Martin spoke to several investors about a potential capital increase as it makes a final effort to bring in fresh funding, the people said at the time.
Geely already controls Sweden’s Volvo Cars and Britain’s Lotus Cars and has a minority stake in Daimler AG. It was examining Aston Martin primarily to find a technology-sharing deal to benefit businesses such as Lotus.
Aston Martin needs at least 400 million pounds of fresh equity to keep funding its critical products, Jefferies Financial Group Inc. said in note to clients earlier this week.
No final agreements have been reached, and the carmaker could fail to reach an agreement or decide against bringing in new investors, the people said. Representatives for Aston Martin and Geely declined to comment, while a representative for Stroll couldn’t immediately be reached for comment.
The U.K. company, best known as the ride of choice for on-screen spy James Bond, has been battered by an industry downturn, uncertainty around Brexit and a lukewarm response to some models. Weaker-than-expected sales have forced the carmaker to scale back its sales volume targets.
It is set to begin deliveries this year for the new DBX sports-utility vehicle that’s turned into a make-or-break product for the company. The $189,000 DBX sits at the heart of plans to more than double annual output to 14,000 autos by 2023.
Raising fresh funds could help with the rollout of the SUV as well as lower debt levels, the people said. Aston Martin previously announced it has received 1,800 orders for the model, meeting a condition for the carmaker to obtain a follow-on loan for $100 million.
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