Aston Martin Lagonda shares nosedived on Thursday morning after an industry report claimed the firm was plotting to raise more capital from investors.
Autocar reported late on Wednesday that the British automotive giant is planning to raise fresh funds in order to safeguard its future, strengthen its financial position and ramp up investment in next-generation products.
Investors reacted negatively to the report, with Aston Martin Lagonda Global Holdings shares down 12.5 per cent to 414.7p approaching midday.
Aston Martin’s net debt rose by 32.4 per cent in the year to 31 March at £956.8million
Aston Martin’s pre-tax losses more than doubled to £111million in the first quarter of this year, even as sales rose 4 per cent.
The firm’s liabilities are also on the rise, with net debt reaching £956.8million as of 31 March, up 32.4 per cent on the same last year.
According to Autocar, potential fundraising plans could include bringing in a new investor as a board member in exchange for a cash injection of ‘upwards of £200million’.
An Aston Martin Lagonda spokesperson declined to comment.
Tobias Moers was replaced by ex-Ferrari boss Amedeo Felisa as boss in May, with Aston Martin signalling a strong push into the electric car market.
Moers is said to have presided over a collapse in morale as dozens of senior employees left.
Chairman Lawrence Stroll said at the time that Felisa would help ‘deliver the next-generation sports cars, and lead the way to electrification’.
‘Now, there is a need for the business to enter a new phase of growth with a new leadership team and structure to ensure we deliver on our goals,’ Stroll added.
Aston Martin, which has been declared bankrupt seven times since its 1913 founding, has seen its shares fall more than 70 per cent since the start of the year.
Its shares are roughly 96 per cent off their IPO price in October 2018, when it was valued at $4billion.
But profit warnings, fundraisings and a bailout led by Stroll mean it is worth just under £1.2billion today.
The firm does expect prospects to improve this year, however, with profits forecast to increase by 50 per cent and its new DBX SUV expected to represent over 50 per cent of sales going forwards.
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