Aston Martin Looks to Raise Funds For New Models

Aston Martin is preparing to raise funds to expand its range of models into new areas including crossover SUVs, two sources with knowledge of the matter said, as the loss-making sports car maker steps up its turnaround efforts under a new boss. The British high-end marque is working on plans to issue new shares or bonds and extend its current recovery strategy by three years to 2020, the sources said, adding that luxury sedans and hybrid models also featured in its plans.

"It's an expansion from the current model range," one said, speaking anonymously because the matter isn't public.

Aston Martin, James Bond's carmaker of choice, is the underdog in a British luxury auto industry dominated by Tata-owned Jaguar Land Rover, its next-door neighbour in the otherwise quiet Warwickshire village of Gaydon. Held back by its ageing models and weak investment, the company has missed out on a luxury car boom that saw the global market almost double in five years.

Last year it delivered 4,200 cars, far short of a pre-financial crisis peak of 7,300 in 2007. Aston Martin is examining debt- or equity-raising options to finance a bigger plan, the sources said. Further cash will be freed up by more efficient management of working capital such as vehicle and parts inventory. The fundraising would generate 100-150 million pounds ($156-$234 million), with any new shares offered to current investors, said one of the sources, close to the strategy discussions.

Aston Martin and its main private-equity backers, Kuwait's Investment Dar and Italy's Investindustrial, declined to comment. Bondholder Waddell & Reed did not return calls. Milan-based Investindustrial and the Kuwaitis together control 93 per cent of Aston Martin, acquired in successive capital raisings since Ford sold the company in 2007. A further 5 per cent is held by Daimler, underpinning a partnership struck last year for the German firm to supply Mercedes engines and technology to Aston Martin.Aston has already begun updating existing models under a 500 million pound investment strategy drawn up in 2012, when Investindustrial paid 150 million pounds for a 37.5 per cent stake.

That plan sees a replacement for the 120,000 pound DB9 in late 2016 and a return to profitability the following year.