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posted: 12/7/2012 7:34 AM

Aston Martin sells stake to investment fund

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  • Associated PressThe 1965 Aston Martin DB5 used in "James Bond" movies.

      Associated PressThe 1965 Aston Martin DB5 used in "James Bond" movies.

 
Bloomberg News

Dec. 7 (Bloomberg) -- Aston Martin, the British maker of sports cars featured in James Bond movies, will sell a 37.5 percent stake to Investindustrial to shore up its finances.

The European private equity fund, which is based in London, will buy the stake for 190 million euros ($246 million) via a capital increase, the companies said in a statement today. The agreement implies an enterprise value of 940 million euros for the Gaydon, England-based automaker.

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"Investindustrial's new investment reflects and sustains the unique position of Aston Martin within the industry," Aston Martin Chairman David Richards said in the statement.

The deal gives Aston Martin a much needed cash infusion to invest in automotive resources to compete with Volkswagen AG's Bentley and Fiat SpA's Ferrari. Investment Dar Co., which led a group of investors that bought Aston Martin from Ford Motor Co. in 2007 for 503 million pounds, will remain a major shareholder.

The deal returns Investindustrial to high-end vehicle manufacturing after selling Italian motorcycle maker Ducati to VW's Audi this year for 860 million euros. While a competing bid from Indian automaker Mahindra & Mahindra Ltd. was higher, Investindustrial's offer includes plans to use technology and car parts from AMG, the Mercedes-Benz unit that makes sports cars, two people familiar with the talks said last week.

The investment fund plans to "achieve a similar transformation and rejuvenation that we achieved with Ducati, by expanding the model range and strengthening the dealership network," Andrea Bonomi, Investindustrial's chairman, said in the statement.

Needing Funds

Investment Dar hasn't had funds to spare for Aston Martin. The Kuwaiti company agreed in February last year to reorganize 1.37 billion dinars ($4.9 billion) of its own debt after missing payment on an Islamic bond in May 2009. The restructuring is being implemented under Kuwait's Financial Stability Law, enacted by the government in April 2009 to bolster financial institutions hurt by the credit crisis.

Aston Martin is the only global luxury-car brand that's not part of a larger auto group and its independence could be a handicap with the auto industry under pressure to develop technologies to improve fuel efficiency. Bayerische Motoren Werke AG is investing more than 1 billion euros this year on making engines more efficient and developing electric vehicles. That sum exceeds Aston Martin's 2011 revenue of 507 million pounds.

The British carmaker's adjusted earnings before interest taxes, depreciation and amortization last year fell 18 percent to 76.2 million pounds, with deliveries steady at about 4,200 vehicles.

--With assistance from Aaron Kirchfeld in London. Editors: Chad Thomas, Heather Harris

To contact the reporters on this story: Jacqueline Simmons in Paris at jackiembloomberg.net; Alex Webb in Frankfurt at awebb25bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16bloomberg.net

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