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Mercedes-Benz to boost stake in Aston Martin to 20%, lend it some tech

Daimler unit Mercedes-Benz is to lift its stake in Britain's Aston Martin to up to 20% by 2023, making it one of the struggling British carmaker's largest shareholders, Aston said on Tuesday. Aston Martin, popular for being James Bond's carmaker of choice, has suffered a torrid time since it went public two years ago, with its shares losing two-thirds of their value this year. The 107-year-old firm hired Tobias Moers, former CEO of Mercedes-AMG, as its new boss from August. Aston said the increase in Mercedes-Benz's stake, from 2.6% currently, would take place in several stages as part of a wider issue of 250 million shares at 50 pence each. The stock issued to the German group will have a maximum value of 286 million pounds ($372.7 million), it said. The deal will see an existing supply agreement between the two firms, in place since 2013, expanded to give Aston Martin access to key Mercedes' technology, including hybrid and electric drive systems. "We take another major step forward as our long-term partnership with Mercedes-Benz AG moves to another level, with them becoming one of the company's largest shareholders," said Aston's chairman and biggest shareholder Lawrence Stroll. The German firm will get the right to nominate one non-executive director to Aston Martin's board after its first shareholding increase, the London-listed firm said. Aston, which has started deliveries of its first sport utility vehicle, the DBX, said on Tuesday it swung into an adjusted core loss of 29 million pounds in the third quarter, versus a profit of 43 million pounds last year. Revenue in the period nearly halved to 124 million pounds, it said. Aston Martin is targeting annual capex of 250 million pounds to 300 million pounds per year between 2021 and 2025. It envisages production volumes of about 10,000 units, revenues of about 2 billion pounds and adjusted core profit of 500 million pounds by financial years 2024 or 2025.

Bond, junk bond? Aston Martin financial ratings go south as it awaits DBX

Ratings agencies Standard & Poor's and Moody's have taken a dim view of Aston Martin Lagonda. S&P cut its credit rating on the storied carmaker deeper into junk territory this week, and Moody's revised its credit outlook to "negative" after the company raised $150 million in debt from a bond issue at 12% interest, with the option to raise another $100 million at 15%. The Standard & Poor's rating was trimmed by one notch to 'CCC+', which reflects substantial risks and takes it close to default territory after a faster-than-expected cash burn this year. The outlook is negative.  The negative outlook reflects ongoing pressure on profits, a high cash burn, and very high leverage in the face of heightened risks linked to a potential no-deal Brexit and new tariffs on car imports threatened by the United States. The potential salvation for the company is its new DBX luxury SUV, the success of which is critical to its ambitious growth strategy and ongoing creditworthiness, S&P said. But Moody's noted that it's burning cash at a high rate as it nears the launch of the DBX. The British carmaker, known as James Bond's favorite marque, has been hit by falling demand in Europe, the Middle East and Africa. It slumped to a first-half loss in July. Chief Executive Andy Palmer said concerns around Brexit and U.S.-China trade relations were skewing the outlook to the downside, so it was prudent to address investor concerns about its balance sheet. "Taking this debt on — short-term debt — is we think the correct tool to completely remove that thesis that we don't have sufficient liquidity," he told Reuters. "In every substantial and material way, this ensures that we can get through to DBX in spite of what all of those global uncertainties might throw at us." The main tranche comprises notes with an interest rate of 12% due in 2022, while the additional notes could be issued under the same terms if permitted, or could be issued as unsecured notes with an interest rate of 15%, Aston Martin said. Shares of stock in the company, which have had a precipitous fall since they listed in London in October 2018 at 19 pounds, were trading down 5% at 545 pence in early deals. Broker AJ Bell said Aston Martin was known for its high end prices and that situation now also applied to its debt. "These rates are very high and are a major red flag that investors consider the car company to be a high risk entity," it said.

Aston Martin Valkyrie AMR Pro production car revealed

Three years ago, Aston Martin showed what it had in mind for an extra-serious AMR Pro version of the Valkyrie hypercar. It was part of a splashy Geneva display with other supercars, and it was leading into Aston's plans to take the Valkyrie to Le Mans. Then there were financial issues, a postponement of Le Mans competition, and that whole pandemic thing. But now, the regular Valkyrie is going to reach customers soon, and Aston Martin has revealed the production version of the Valkyrie AMR Pro. Aston notes that this AMR Pro Valkyrie was developed using a lot of what the company learned from the race car program, and even going a bit beyond since the AMR Pro doesn't have to meet the rules for Le Mans. The company also brings up an expected lap time of 3 minutes 20 seconds at the Circuit de la Sarthe, the track used for 24 Hours of Le Mans. For reference, Toyota's LMP race cars with no production car roots have lapped between 3 minutes 14 seconds and 3 minutes 17 seconds. Besides being an impressive theoretical time, the racing reference has us hoping the company will one day enter the Valkyrie in the recently created hypercar class. Setting aside the Le Mans connections, the Valkyrie AMR Pro really does have some major modifications compared to the standard car. The chassis is made lighter with additional carbon fiber, such as for the suspension control arms, as well as Perspex windows. The whole car is 10.5 inches longer overall due to more aggressive aerodynamic aids that double the amount of downforce the Valkyrie produces. With it, Aston claims the Valkyrie AMR Pro can produce cornering forces as great as 3G. The wheelbase is 15 inches longer, the front track is 3.8 inches wider, and the rear track is 4.5 inches wider. As for the powertrain, the Valkyrie AMR Pro will still use a version of the 6.5-liter Cosworth V12, but unlike the standard version, the AMR Pro will ditch the electric motor and its related components. This is a move to further reduce weight. Power will also be down slightly to 1,000 horsepower. Of course, that's still a lot of power, and the 11,000-rpm redline will remain. When Aston initially showed the AMR Pro, it said it would only build 25 examples. That seems to have increased, as now Aston says it will build 40 examples, plus two prototypes. A price hasn't been given, nor has availability, but apparently deliveries will start at the end of this year, not long after the regular cars reach owners. Related Video: