Aston Martin sells F1 stake as Stroll invests more cash amid Trump tariffs

Shares of the company famous for being fictional secret agent James Bond's car of choice had surged 11.8% to 72.95 pence by 0930 GMT on Monday. The equity raise is Aston Martin's seventh since the arrival in 2020 of Chairman Lawrence Stroll, who has pumped around 600 million pounds into the luxury carmaker.

Delivery delays and depressed demand in China have plagued the company in recent years, forcing it to cut 5% of its workforce last month.

Stroll's Yew Tree Consortium will invest a further 52.5 million pounds by purchasing 75 million shares at 70 pence per share. His stake will rise to about 33% from 27.7%, with the possibility of increasing further to up to 35%.

Yew Tree will seek a waiver from a rule that requires an entity owning more than 30% of a UK-listed company to make an offer to buy out the remaining shareholders.

"Exemptions have been granted in the past, yet it feels like a takeover would be a better outcome as it would mean the car company would be free to pursue a turnaround strategy out of the public spotlight," said Russ Mould, investment director at AJ Bell.

The sale of a stake in the Aston Martin Aramco Formula 1team will help the company realise a premium to the current book value of about 74 million pounds, but will not affect an existing long-term sponsorship deal, the carmaker said.

The Trump administration's tariff on imported vehicles forced the company to now forecast "modest growth" in annual car volumes, compared with mid-single-digit percentage growth earlier. The U.S. contributed more than a third of Aston Martin's revenue last year.

Further impact from the levy was being reviewed, the company said, but it backed its target of positive operating earnings in 2025 and being free cash flow positive in the second half.

Statement from Aston Martin Aramco Formula One Team: Today’s news underscores our Executive Chairman Lawrence Stroll’s long-term and unwavering commitment to both Aston Martin and the current Formula One Team. A long-term contract is now in place to ensure the Aston Martin name remains at the pinnacle of motorsport for decades to come.

The proposed transactions, which will see Aston Martin Lagonda (AML) sell its stake in the Aston Martin Aramco Formula One Team (AMF1), will result in Mr Stroll increasing his shareholding in AML to 33% while strengthening the company's balance sheet by over £125-million.

"Mr Stroll has commissioned the investment bank Raine Group to help find a buyer for AML’s stake in the Formula One team. Raine will work closely with AMF1’s commercial chief Jeff Slack to secure a strategic investor who can add long-term value to the team and the brand.

Mr Stroll said: “These moves demonstrate that Aston Martin’s place on the Formula One grid is as secure as ever. AML recently re-committed to its long-term sponsorship and licensing agreement with AMF1, confirming that the legendary Aston Martin brand and its British racing green colours will compete in Formula One for decades to come.” (Reporting by Shashwat Awasthi, Additional reporting by GrandPrix247))