Aston Martin defends contentious £550mn debt deal
UK carmaker reports bigger than expected quarterly loss
Aston Martin has defended a contentious £550mn debt financing deal as “important for the company as a whole” as the struggling UK carmaker reported bigger than expected quarterly losses.
The company’s adjusted loss before tax and interest narrowed to £52mn for the quarter ended June, from a £57mn loss in the same period last year, but higher than analysts’ expectations of a £45mn loss. Gross profit margin of 33 per cent was lower than an expected 36 per cent due to continuing dealer support to clear vehicle inventory.
Aston Martin last week struck a deal to borrow £550mn from BlackRock-owned private credit firm HPS, which it said would boost its pro forma liquidity to £340mn from £145mn liquidity at the end of June.
The carmaker, whose shareholders include its billionaire chair Lawrence Stroll, China’s Geely and Saudi Arabia’s Public Investment Fund, has been repeatedly forced to raise cash as it struggles to stem years of steep losses. Its net debt also remained high at £1.4bn.
HPS routinely provides capital to businesses in dire need of cash, charging high fees in the process.
Aston’s latest move was challenged by existing creditors who argued that a financing deal that placed assets beyond their reach breached key terms of the company’s existing debt. The proceeds of the deal were also used to repay some of the money that was drawn from a £50mn facility offered by a consortium backed by Stroll in April.
The debt financing followed the £50mn sale of Aston’s Formula 1 naming rights to AMR GP Holdings, the racing team’s holding company that is indirectly controlled by Stroll.
The deal was also criticised by existing shareholders who questioned the valuation as too low considering that Stroll had secured perpetual rights to use the Aston Martin name for the racing name. Stroll has previously told the FT that he was not considering an exit from his investment in the carmaker after the £50mn sale.
During an earnings call on Wednesday, Henning Cosman, analyst at Barclays, questioned executives on the rationale of the £550mn financing and its significance for both the company’s majority and minority shareholders.
“Look, the board sees the financing as important for the company as a whole,” said chief financial officer Doug Lafferty. “I don’t think there’s any differentiation between major stakeholders or minor shareholders.”
Chief executive Adrian Hallmark added that the liquidity injection gave the company “additional resilience and further flexibility to execute our current and future product plans”.
Despite the miss in gross profit margin, shares in Aston rose 3 per cent on Wednesday morning, as revenue jumped 62 per cent to £358mn on the back of an increase in sales of its higher-margin Valhalla supercar model, which had an average selling price of £1.1mn.
For 2026, Aston maintained its projection that its wholesale volumes would remain flat at about 5,450 vehicles while its gross margin was expected to improve into the upper 30 per cent level compared with 29 per cent last year.