Aston plans to raise £653 million with Saudi investment

PIF will become shareholder No. 2 after the Stroll consortium

The board of directors of the automaker rejected the proposal of PE and Geely

Aston Martin intends to issue 23.3 million new shares to the Saudi state investment fund.

Aston Martin Lagonda Global Holdings Plc plans to raise £653 million ($772 million) from Saudi Arabia's sovereign wealth fund and existing shareholders in a bid to reduce debt and free up cash for future product development.

The automaker intends to issue 23.3 million new shares to the Saudi Sovereign Wealth Fund at a price of £3.35 per share, giving it a 17% stake, Aston Martin said in a statement. The company will also take over the rights issue with PIF, chairman Lawrence Stroll's yew tree consortium and Mercedes-Benz AG, investing a total of £335 million.

Aston has reviewed and rejected a £1.3bn equity investment offer from private equity firm Investindustrial Group Holdings and Geely International Ltd. The British automaker's board of directors said it believed the proposal overvalued the company's new equity requirements, would greatly dilute existing shareholders and would be difficult to meet. Investindustrial, an Italian private equity firm, was one of Aston's leading investors before its initial public offering in 2018.

Unveiled during its London listing as a rival to the Ferrari NV, Aston's struggle led to a 97% drop in its shares. The automaker was forced in 2020 to seek salvation from Stroll, a Canadian billionaire who invested money and established closer ties with Mercedes-Benz. He vehemently denied that the company needed to raise more money five months ago.

In May, Aston appointed Ferrari veteran Amedeo Feliz as its chief executive officer to replace Tobias Moers, whom Stroll hired from mercedes's AMG division two years ago. Aston expects to complete its capital raising by the end of September.

(Updates with the chairman's denial five months ago that the company needed to raise more money in the fourth paragraph; an earlier version of that story corrected the amount in the title.)