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Aston Martin's lifeline buys carmaker time as SUV hits road

Canadian billionaire Lawrence Stroll and investors have rescued Aston Martin with a 500 million pound cash injection that analysts say will help stabilize the British carmaker whose first sport utility vehicle (SUV) is set to hit the road. Stroll agreed to buy up to 20% of the 107-year-old company and will become executive chairman of James Bond's automaker of choice, which has gone bankrupt seven times in its checkered history. A consortium led by Stroll will invest 182 million pounds($239 million), whilst major existing shareholders - primarily Italian and Kuwaiti private equity groups - will be part of a rights issue to raise 318 million pounds. "It likely gives them enough liquidity to tide them over for a couple of years," said Charles Coldicott, Redburn equity research analyst. Outgoing chairwoman Penny Hughes, who will be replaced by Stroll, spelt out the degree of trouble the firm has been in after core sales fell last year. "The difficult trading performance in 2019 resulted in severe pressure on liquidity which has left the company with no alternative but to seek substantial additional equity financing," she said. "Without this the balance sheet is not robust enough to support the operations of the group." Now Aston will need to turn the financial lifeline into part of a sustainable plan as it delays investment in electric vehicles and cuts its operating costs. A key future milestone includes around 1 billion pounds worth of debt due to mature in 2022. The company also suffers from lower gross margins than rival Ferrari, according to analysts at Jefferies, who have said scaling up is just as important as extra capital. Key to the company's success is its first foray into the lucrative SUV market, a late entrant compared to many rivals such as Volkswagen-owned Bentley and BMW's Rolls-Royce. Aston has built a new factory in Wales to make the model, known as the DBX, which it hopes will attract more women to the brand and some buyers to purchase both it and a vehicle from its traditional line-up. With the DBX model not due to roll off the production line until the second quarter of this year, the firm has taken the cost with only some of the benefit so far. Based in central England, Aston said earlier this month that it already had around 1,800 orders for the car which will retail for 158,000 pounds in Britain, a "materially better" rate than for any previous models.

Aston Martin to raise funds for new models including CUV, hybrid

Aston Martin CEO Andy Palmer named three leads for new vehicle programs when he took the reins, now the company is looking for the money to give those leads something to do. Reuters reports that the Gaydon firm is considering debt or equity financing to raise 100 to 150 million pounds ($156M to $234M US) in funding for "an expansion from the current model range," according to an unnamed source. On top of that investment round, Aston Martin is overhauling its working capital streams to unlock more funds. As one of the industry's few remaining independent carmakers, the company has an intense five years ahead of it, working to revamp its current vehicles with a 500-million-pound investment, entering new segments to grow sales to roughly 10,000 units annually from 4,200 cars in 2013, and pay down hundreds of millions of pounds in current debt. The big high notes observers will be looking for over the next few years are the successor to the DB9, pegged for 2016, profitability predicted in 2017, a huge debt note due in 2018, and the formal end of the recovery period in 2020. Our own eyes will be locked on the DB10 in Spectre, naturally, and the Lagonda-honoring Taraf in other markets, hopefully. At least one of the new vehicles is expected to be a crossover, a segment Aston seemingly cannot ignore now that Bentley and Rolls-Royce are committed to making plays there. However, Reuters says an official announcement of what we can expect won't come until the 2015 Geneva Motor Show. Among the other models said to be up for funding? Sedans (perhaps including a Rapide replacement?) and an unspecified hybrid.

UK offers Aston Martin military base to produce DBX in Wales

The British government is doing its best to encourage Aston Martin to build the DBX in the United Kingdom. To that end, Prime Minister David Cameron made a public offer to the automaker Thursday to make use of a military facility in Wales to produce the crossover. The location is St Athan, a Royal Air Force base and Ministry of Defence facility with space left vacant since a planned military academy earmarked for the site was canceled less than five years ago. One of its empty hangars is what Cameron offered to Aston Martin, according to the BBC. The facility is located near the airport in the Welsh capital of Cardiff, a little over two hours from the company's headquarters and principal manufacturing site in Gaydon. If Aston takes the bait, the site would be used to manufacture the DBX that would become the company's first crossover. Rivals Jaguar, Bentley, Maserati, and Lamborghini are all planning to launch their first crossovers, as well. Aston showcased a concept version of the DBX at the Geneva Motor Show this March, but the production version is expected to go a bit more mainstream, ditching the electric powertrain and two-door layout in favor of more conventional propulsion and four-door setup. The company is also said to be considering opening a new facility in the United States, specifically in Alabama near the Mercedes plant there, to handle production of the DBX. Other locations within the UK are also said to be under consideration, but Aston has yet to make a decision – or at least an announcement – on where the crossover might be assembled. When Aston previously branched out with the launch of the Rapide, it contracted Magna Steyr to handle assembly on its behalf in Austria, before moving production back home. The contract manufacturing facility is the same to which the Jaguar Land Rover is expected to entrust assembly of the F-Pace crossover. It's also where the G-Class is built for Mercedes, which in turn similarly hired AM General recently to assume production of the R-Class crossover. Related Video: