LONDON: Aston Martin Lagonda Global Holdings Plc’s shares surged after it said China’s Geely Automobile Holdings Ltd will double its stake and become the UK sportscar maker’s third biggest shareholder.
The transaction will unlock £95 million (RM536mil) for the British sportscar maker, whose shares rose as much as 25% in early London trading.
As part of a £234 million (RM1.3bil) deal, Geely will acquire a 17% stake in the company, buying 42 million shares from chairman Lawrence Stroll’s Yew Tree consortium along with 28 million new shares, Aston Martin said in a stock exchange filing. Geely will also get the right to appoint one director on Aston Martin’s board.
Aston Martin has perennially struggled with cash and roped in Saudi Arabia’s Public Investment Fund as a shareholder last year as Stroll looks to turn the carmaker around and pivot to battery-powered sports cars.
Analysts have in the past said that Aston Martin’s lack of scale and precarious cash balance made it vulnerable.
As part of the agreement with Aston Martin, Geely agreed to a standstill until August 2024 to not acquire shares that will take its stake in the company to more than 22%, the filing said.
Bloomberg first reported in October 2022 that Billionaire Li Shifu, who controls Geely, was looking to boost his stake in the carmaker to increase collaboration with the carmaker.
The investment in Aston Martin deepens Geely’s vast footprint in Europe, where it controls Volvo Car AB and recently inked a deal with Renault SA to pool combustion-engine assets as the industry moves into the electric era.
