Aston Martin’s billionaire chairman wants to pay off carmaker’s debt

Aston Martin Lagonda Global Holdings chairman Lawrence Stroll gives himself high marks for the turnaround he’s overseen so far. 

His next orders of business — figure out how to speed up the process of hand-building what he calls the most complex car ever and paying off debt.

The billionaire Canadian who came to the iconic British company’s rescue in early 2020 spoke to reporters on Thursday before the unveiling of the AMR22, Aston Martin’s Formula One car for the upcoming season. Stroll talked up the automaker’s progress paring inventory and improving its cash position, which he said should help bring down interest costs in the coming years.

“I will be renegotiating the bonds at a more favourable rate, probably, and taking some cash to pay off part of the debt. This company will be cash flow positive in 2023.”

In addition to injecting much-needed cash, Stroll forged closer ties with Germany’s Mercedes-Benz to put Aston Martin on steadier footing in the midst of the Covid-19 pandemic. In mid-2020 he hired Tobias Moers, who previously led Mercedes’ AMG performance-car business, as CEO.

Aston Martin had net debt of £809m (roughly R16,761,294,000) at the end of the third quarter and expects interest costs of £165m (roughly R3,401,268,750) in 2021, it said in November. A year ago, the company raised $98.5m (roughly R1,501,041,500) in Senior Secured Notes due in 2025 with a 10.5% coupon. These notes come with a four-year call protection, meaning refinancing the senior debt will come with a penalty.

Aston Martin may buy back some of the more expensive mezzanine bonds once the company generates cash, Stroll said, ruling out the need for any further capital raising.

“We don’t need any more money. Let me be crystal-clear, black-and-white — we do not need money.”

Supercar Issues

While Aston Martin battled issues with complexity that delayed initial assembly of its £2.4m (roughly R36,573,600) Valkyrie supercars, Stroll said the project is on track after technicians from his Formula One team were parachuted in to help.

“Everything has been resolved, but they’re taking a little longer to build than initially established,” Stroll said of the sold-out cars, adding that not a single customer had asked for their deposit back.

Last month, Aston Martin warned that fourth-quarter earnings would take a hit after the company delivered fewer of the supercars than anticipated.

“The only thing I’ve disappointed on since I got here is the number of Valkyries that we said we were going to deliver last year vs what we did,” Stroll said.

Mercedes will be a crucial partner as Aston Martin prepares to present its first battery-electric model in 2025. By 2026 all of the British brand’s new models will offer an electrified power train option, with Mercedes supplying hybrid and electric-drive systems.

Aston Martin has held initial talks with Britishvolt, the UK government-backed battery company that last month signed a preliminary agreement with Group Lotus.

While Stroll acknowledged some employees have left the carmaker since he took over, he said the company hired 370 new workers, roughly 170 of which are new engineers.

“We are going to have a separate, special sauce. We’re going to have an EV platform that will make Aston Martin special.”

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