MARKET REPORT: White knight revs up Aston Martin rescue in desperate bid to keep the ailing luxury car maker afloat
Aston Martin’s white knight will pump even more cash into the luxury car maker in a desperate bid to keep it afloat.
James Bond’s favourite marque had already seen its market value crash before the pandemic-induced stock market rout.
But the coronavirus outbreak’s effect on sales of cars in China and the delay to the release of the 25th Bond film No Time To Die have pummelled its stock even further.
James Bond’s favourite marque had already seen its market value crash before the pandemic-induced stock market rout
Formula 1 billionaire Lawrence Stroll and a group of other investors struck a deal to save Aston in January, which included pumping £55.5million into the company through a short-term loan.
The consortium has now agreed to raise this by £20million, to £75.5million in total, to keep it afloat in the immediate future.
But because of the fall in Aston’s share price, other parts of the deal have been renegotiated, because they were based on a share price of 400p.
Stroll’s group will now take a bigger stake in the company – 25 per cent, rather than 20 per cent – for less money.
And Aston will raise more money through an issue of new shares than previously planned – £536million instead of £500million.
Stock Watch – UK Oil & Gas
UK Oil & Gas (UKOG) soared after regulators approved its development plan for an oil field in Surrey.
The energy minnow said the green light from the Oil & Gas Authority for the Horse Hill site means it will be easier to raise more money in future.
And it will also cut costs at the field because it can enter into longer-term – and cheaper – deals with contractors.
Shares in UKOG, which owns and 86 per cent interest in the field, surged 26.7 per cent, or 0.1p, to 0.47p yesterday.
In a statement, Aston said the coronavirus pandemic has not yet affected production but it has affected sales in China and Asia – adding that it ‘has the potential to do the same in other markets’.
Aston floated on the London Stock Exchange for 1900p in October 2018 – valuing it at £4.3billion – but profit warnings, huge losses and emergency fundraisings had hammered the company’s share price by late 2019.
Its shares fell 3.9 per cent, or 8.3p, to 206p last night, though this was before the 107-year-old company made the announcement about Stroll’s increased investment, which was revealed after the market had closed.
Volatility was the word on the stock market yesterday, though the FTSE 100 managed to rise 2.5 per cent, or 128.63 points, to 5366.11 by the closing bell.
Miners led the index higher as China recorded a sharp drop in the rate of new infections, as traders prepared for the commodity-hungry country to ramp up industrial production.
Steel maker Evraz rose 12.5 per cent, or 25.4p, to 228.8p, the world’s biggest mining company BHP added 12.2 per cent, or 114.2p, to 1054p and Rio Tinto climbed 10.3 per cent, or 306p, to 3274p.
The FTSE 250 fell 1pc, or 155.42 points, to 15562. Elsewhere on the FTSE 250, Travelex-owner Finablr staged a staggering rebound, increasing in value by 158.4 per cent, or 7.13p, to 11.63p, a day after it warned investors that its very survival was in doubt.
Citi brokers took kindly to Next’s shares, upgrading them from ‘sell’ to ‘neutral’. They think the stock is cheaper than it should be after a 40 per cent plunge since the coronavirus outbreak began rattling stock markets.
Analysts also said the High Street retailer is well-placed to cope with the pandemic, which could postpone a share buyback scheme but not hit its books.
Citi believes Next’s shares are worth 4800p, from 5000p.
The retailer’s stock rose 2.1 per cent, or 94p, to 4481p.
Over on AIM, pharmaceutical group Redx Pharma skyrocketed 190 per cent, or 9.5p, to 14.5p, after it confirmed a private company has made another offer to buy it after takeover talks ended two weeks ago.
Yesod Bio-Sciences wants to buy it for 15p per share.