Aston Martin Lagonda Global Holdings PLC (LSE:AML) (AML) has received a shot in the arm from Chinese carmaker Geely, which is investing £234mln in the company via £95mln of new money and the purchase of a big chunk of major shareholder Yew Tree’s holding.
Already a 7.6% shareholder, Geely said its investment is designed to support Aston Martin's growth and vision to be the “world's most desirable ultra-luxury British performance brand”.
Yew Tree, a consortium controlled by Canadian billionaire and Aston Martin’s executive chairman Lawrence Stroll, will remain the car maker’s largest shareholder with a 21% stake, but Geely will now hold 17%.
Geely is buying 42mln shares from Yew Tree at 335p a shot, a hefty 45% premium to yesterday’s close, with a further acquisition of 28mln new shares at the same price to give AML a cash boost.
The Chinese firm, which will be AML’s third largest investor after Yew Tree and the Public Fund (18%) will also be able to appoint a non-executive to the board.
In a statement, Stroll commented: “Geely Holding, who initially became a shareholder last year, sees tremendous potential for Aston Martin's long-term growth and success.
“[Geely] offer us a deep understanding of the key strategic growth market that China represents as well as the opportunity to access their range of technologies and components."
Eric Li, Geely group chairman added: "Our decision to increase our shareholding in Aston Martin reflects our confidence in the company's growth prospects, its technologies and its management team.
“Since first acquiring our minority holding last September, we have worked collaboratively with executive chairman Lawrence Stroll and his colleagues and now look forward to exploring joint technology synergies.”