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Aston Martin raises £125 million amid US tariff fears, China slowdown

March 31, 2025
in Investing
Aston Martin raises £125 million amid US tariff fears, China slowdown
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Aston Martin has secured over £125 million ($161.9 million) in new funding to stay on track amid deepening financial pressures and shifting global demand.

The luxury carmaker, known for its James Bond legacy, announced fresh capital through a combination of investment by its chairman and the sale of a stake in its Formula One team.

The company has struggled with weak demand from China, ongoing delivery delays, and the fallout from supply chain disruptions.

Monday’s announcement marks the sixth time Aston Martin has raised capital since Lawrence Stroll took control in 2020.

Formula One team stake sold to unlock capital

Aston Martin will generate part of the funds by selling a portion of its holding in the Aston Martin Aramco Formula One team.

While the company did not name the buyer, it confirmed that the deal would help unlock a premium to the current book value of around £74 million.

This stake sale is a strategic step to convert a non-core asset into liquidity, as the business recalibrates its global expansion and manufacturing plans.

The carmaker has not disclosed the size of the stake being sold.

The Formula One unit, which has gained visibility in recent seasons, remains partly owned by Chairman Stroll.

The sale is expected to boost Aston Martin’s financial flexibility as it confronts a volatile global environment marked by tariff uncertainty and slowing sales in key international markets.

Stroll’s stake rises to 33%

Chairman Lawrence Stroll’s Yew Tree Consortium will invest a further £52.5 million ($68.0 million) by purchasing 75 million Aston Martin shares at 70 pence each, a 7% premium to Friday’s closing price of 65.4 pence.

The new deal lifts Yew Tree’s stake from about 27.7% to approximately 33%, crossing the 30% threshold that typically requires a shareholder to offer to buy out remaining investors under UK listing rules.

To avoid that requirement, Yew Tree will seek a waiver from regulators.

Aston Martin confirmed that Yew Tree has shown interest in potentially raising its holding further, up to 35%.

Stroll has already invested close to £600 million ($778 million) in the company since 2020, making him one of its most influential stakeholders.

Delivery delays and China demand weigh on forecasts

The funding comes as Aston Martin faces ongoing operational challenges.

The company has struggled to meet delivery timelines, and its performance in China, a major luxury vehicle market, remains underwhelming.

Supply chain problems, combined with macroeconomic pressures, have pushed the carmaker to implement cost-saving measures, including a 5% workforce reduction.

On Monday, Aston Martin revised its 2025 guidance, saying it now expects only “modest growth” in annual car volumes.

This is a downgrade from its earlier forecast of mid-single-digit percentage growth.

The adjustment is partly due to new US tariff threats under the Trump administration, which could impact the pricing and competitiveness of British-made luxury cars in the American market.

Despite the financial pressures, Aston Martin shares rose 5.7% to 69 pence in early trading after the announcement.

Investor sentiment appears buoyed by the fresh capital and Stroll’s continued commitment.

However, the company’s underlying financial health remains strained, and the need to raise funds for the sixth time in under five years signals persistent structural issues.

The latest round of capital injection may ease short-term liquidity concerns, but questions remain about Aston Martin’s long-term strategy amid fierce global competition, rising regulatory hurdles, and macroeconomic headwinds in key markets.

The post Aston Martin raises £125 million amid US tariff fears, China slowdown appeared first on Invezz

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