Arthur J. Villasanta – Fourth Estate Contributor
London, United Kingdom (4E) – Aston Martin Lagonda Ltd, the company whose iconic sportscar is forever associated with James Bond 007, hopes to pocket $6.7 billion when it IPOs in London in early October.
The luxury British carmaker plans to sell around 25 percent of its stock in the first initial public offering (IPO) by a British carmaker in decades. Aston set a price range of £17.50 to £ 2.50 pounds per share for the 25 percent of stock it’s floating, giving the deal a value ranging from £1.0 billion to £1.27 billion.
The IPO will involve a sale of shares the company’s its main owners, Kuwaiti and Italian private equity groups. There is widespread speculation Aston has already received orders for all the stock on sale. A source familiar with the deal said the IPO price was at the bottom end of a price range valuing at £4.02 billion to £5.07 billion.
Aston Martin hopes to announce the final price for its stock on or around Oct. 3. It expects to be admitted to the London Stock Exchange on or around Oct. 8.
Aston has undergone a turnaround since CEO Andy Palmer took over in 2014. Its boosted production and is expanding into new segments. A new factory is due to open in 2019.
On the downside for Aston is Brexit. British carmakers have warned any EU customs checks and duties that might result from Britain’s departure from the European Union in March 2019 will slow production and add costs to an already besieged industry.
Aston builds all its cars in Britain. To head off Brexit-related problems, Palmer said Aston has boosted its stock of engines and components in case free and unfettered trade with the EU ends in a few months’ time.
“We’re up to five days of engine stock for example and we’ve got a very large warehouse in Wellesbourne (in central England) where we have at least five days of car stock,” said Palmer. This inventory represents an increase from the previous three days’ worth of components held by the firm.
“If there are tariffs … for every car we lose because of a 10 percent tariff into Europe, we presumably pick up from Ferrari and Lamborghini in the other direction because obviously their cars become more expensive in the UK,” he said.
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