Aston Martin seeks £245m in equity and debt after sales slump

Aston Martin Lagonda will raise £245m in new equity and high-cost debt as the luxury carmaker seeks funding to see it through the slump in revenues caused by the coronavirus pandemic.

The company will issue new shares worth as much as 19.99% of the existing share capital, raising as much as £190m from investors in the third major change to its financing this year.

Major job cuts announced so far

The coronavirus lockdown has prompted some of the UK’s most prominent companies to announce large-scale job losses. The aviation, automotive and retail sectors have been among the worst hit, as businesses adjust to dramatically reduced revenue projections.

While the government’s job retention scheme has so far protected millions of jobs, fears are mounting that unemployment will rise as the scheme begins to be phased out from August.

Since lockdown began on 23 March, some of the UK’s largest companies have announced plans to cut a total of 60,000 jobs globally, many of which will fall in the UK.

Rolls-Royce – 9,000 jobs
The jet-engine manufacturer has confirmed that 3,000 job cuts, of a planned 9,000 worldwide, will be made in the UK. In May Rolls-Royce said it would make the first round of redundancies through a voluntary programme, with about 1,500 posts being lost at its headquarters in Derby, as well as 700 redundancies in Inchinnan, near Glasgow, another 200 at its Barnoldswick site in Lancashire, and 175 in Solihull, Warwickshire.

BP- 10,000 jobs
The oil company said in June it plans to make 10,000 people redundant worldwide, including an estimated 2,000 in the UK, by the end of the year. The BP chief executive, Bernard Looney, said that the majority of people affected would be those in office-based jobs, including at the most senior levels. BP said it would reduce the number of group leaders by a third, and protect the “frontline” of the company, in its operations.

Centrica- 5,000 jobs
The owner of British Gas announced in June that it intends to cut 5,000 jobs, mostly senior roles, and remove three layers of management, in a bid to simplify the structure of its business. The energy firm has a total workforce of 27,000, of whom 20,000 are in the UK.

Bentley- 1,000 jobs
The luxury carmaker intends to shrink its workforce by almost a quarter, slashing 1,000 roles through a voluntary redundancy scheme. The majority of Bentley’s 4,200 workers are based in Crewe in Cheshire.

Aston Martin Lagonda – 500 jobs
The Warwickshire-based luxury car manufacturer has announced 500 redundancies.

British Airways – 12,000 jobs
The UK flag carrier is holding consultations to make up to 12,000 of its staff redundant, a reduction of one in four jobs at the airline. BA intends to cut roles among its cabin crew, pilots and ground staff, while significantly reducing its operations at Gatwick airport.

Virgin Atlantic – 3,000-plus jobs
Richard Branson’s airline is to cut more than 3,000 jobs, more than a third of its workforce, and will shut its operations at Gatwick.

EasyJet – 4,500 jobs
The airline has announced plans to cut 4,500 employees, or 30% of its workforce.

Ryanair – 3,000 jobs
The Irish airline intends to slash 3,000 roles and reduce staff pay by up to a fifth.

Aer Lingus – 900 jobs
The Irish airline, part of International Airlines Group (IAG) plans to cut 900 jobs.

P&O Ferries – 1,100 jobs
The shipping firm intends to cut more than a quarter of its workforce, a loss of 1,100 jobs. The company, which operates passenger ferries between Dover and Calais, and across the Irish Sea, as well as Hull to Rotterdam and Zeebrugge, will initially offer employees voluntary redundancy.

JCB – 950 jobs
Digger maker JCB said in May up to 950 jobs are at risk after demand for its machines halved due to the coronavirus shutdown.

Ovo Energy – 2,600 jobs
Britain’s second biggest energy supplier announced in May it planned to cut 2,600 jobs and close offices after the lockdown saw more of its customer service move online.

Johnson Matthey – 2,500 jobs
The chemicals company said in June it is planning to make 2,500 redundancies worldwide over the next three years. The move will affect 17% of the workforce at the firm, which is a major supplier of material for catalytic converters.

Bombardier – 600 jobs
The Canadian plane maker will cut 600 jobs in Northern Ireland, as part of 2,500 redundancies announced in June.

The Restaurant Group – 1,500 jobs
The owner of Tex-Mex dining chain Chiquito, and other brands including Wagamama and Frankie & Benny’s, said in March that most branches of Chiquito and all 11 of its Food & Fuel pubs would not reopen after the lockdown, leading to the loss of 1,500 jobs.

Monsoon Accessorize – 345 jobs
The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal which saw 35 stores close permanently and led to the loss of 545 jobs.

Clarks – 900 jobs
Clarks plans to cut 900 office jobs worldwide as part of a wider turnaround strategy

Oasis and Warehouse – 1,800 jobs
The fashion brands were bought out of administration by restructuring firm Hilco in April, in a deal which led to the permanently closure of all of their stores and the loss of more than 1,800 jobs.

Debenhams – 4,000 jobs
At least 4,000 jobs will be lost at Debenhams as a result of restructuring, following its collapse into administration in April, for the second time in a year.

Mulberry – 470 jobs
The luxury fashion and accessories brand said in June it is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.

Jaguar Land Rover – 1,100 jobs
The car firm is to cut 1,100 contract workers at manufacturing plants the UK, potentially affecting factories at Halewood on Merseyside and Solihull and Castle Bromwich in the West Midlands.

Travis Perkins – 2,500 jobs
The builders’ merchant is cutting 2,500 jobs in the UK, accounting for almost a 10th of its 30,000-strong workforce. The company, which is behind DIY retailer Wickes and Toolstation, said the job losses will affect staff in areas including distribution, administrative roles and sales. The move will also affect staff across 165 stores that are now earmarked for closure.

Aston Martin will also draw down about $68m (£55m) of borrowing, due to be repaid in 2022, at an expensive 12% interest rate. The borrowing terms were agreed in September, before billionaire Lawrence Stroll effectively took control of the company just as the coronavirus pandemic began.

The pandemic added to the carmaker’s struggles, forcing dealerships around the world to shut and choking off revenues. The company lost £119m in the first quarter, and on Friday it said that sales would be lower in the second quarter. More than 90% of its dealership network have now reopened, Aston Martin said.

Since taking control and sacking former chief executive Andy Palmer, Stroll has made it his priority to reduce the number of cars stuck at dealers to try to retain Aston Martin’s elite branding, as well as delivering the first of its new DBX SUVs to customers. New chief executive Tobias Moers, the boss of Mercedes-Benz’s performance division, will take over on 1 August.

Aston Martin on Friday said it had reduced dealer stock by 617 cars. It will make the first deliveries of the DBX, which was crucial to its pre-pandemic expansion plans, in July.

Stroll, who has taken the executive chairman role, said: “We are making very good progress on my first priority, the rebalancing of supply and demand and reducing dealer stock as we reset the business and restore exclusivity. We have also successfully completed all test production trials for DBX and have scaled up [the St Athan DBX factory] for full production.”

Aston Martin’s shares fell by 12% on Friday morning to a low of 53.4p. The company floated in October 2018 at £19 per share.

Stroll’s investment consortium, which includes British digger-maker JCB, will buy a quarter of the new shares, while Italian investors InvestIndustrial will take 8%.

The carmaker also on Friday said it has received approval for a £20m loan from the government-backed coronavirus large business interruption loan scheme and that it was in talks for another £50m of trade financing.

Source: Read Full Article