Saudi Arabia's PIF takes stake in Aston Martin

Saudi Arabia's sovereign wealth fund PIF has taken a stake in Aston Martin Lagonda, a timely influx of cash that will help the troubled luxury car maker pay down outstanding debt.

Aston Martin Lagonda executive chairman Lawrence Stroll likely initiated the deal by leveraging his relationship with Aston Martin F1 title sponsor Aramco which is owned by Saudi Arabia's Public Investment Fund.

PIF's investment - divided between a participation in a £575m rights issue and a direct £78m purchase of shares - will leave the fund as the second largest shareholder of AML after Yew Tree, the consortium of investors led by Stroll.

Along with PIF, Yew Tree and Mercedes-Benz will also take part in the rights issue and equity deal that seeks to raise £650m of capital.

When all is said and done, Yew Tree's stake will fall to 18.7%, PIF's stake will stand at 16.7% while Mercedes-Benz holdings will be reduced to 9.7%

Since Stroll and his fellow investors took control of AML in early 2020 and saved the company from bankruptcy, the legendary automotive manufacturer has struggled to stabilize its business and generate the cash necessary to invest in new models and in electric technology.

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Furthermore, delays to the introduction of its Valkyrie hypercar model and of its DBX 707 SUV also impacted the company's top and bottom line. Aston Martin is expected to launch its first full electric car – a priority for the company - by 2025.

"Today's announcement marks the latest success in the evolution of Aston Martin, the restoration of the business and balance sheet we inherited, and the acceleration of our long-term growth potential."

Aston Martin is the second high-end British automotive manufacturer to receive an investment from PIF, with the sovereign wealth fund taking part last summer in a £550m equity raise by The McLaren Group.

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