A consortium that includes Quebec billionaires Lawrence Stroll and Andre Desmarais is taking a significant stake in British car manufacturer Aston Martin — a move expected to have repercussions in the Formula One world.
Under an agreement announced Friday, the group led by Stroll will inject $316 million to acquire a 16.7 per cent stake — which could climb to 20 per cent — in the struggling company as part its plan to raise up to $874 million.
The remaining funds are expected to be raised from current shareholders of the company headquartered in Gaydon, U.K.
Stroll, who built his fortune through investments in such brands as Pierre Cardin, Ralph Lauren and Tommy Hilfiger, will become executive chairman of Aston Martin, founded in 1913 and famous for its luxury cars that figure prominently in the James Bond films.
With the investment, the Racing Point F1 team acquired by Stroll's group in the summer of 2018 will adopt the name Aston Martin beginning in the 2021 season.
Stroll's 21-year-old son Lance is one of the two drivers on the team.
Aston Martin, traded on the London Stock Exchange since the end of 2018, is trying to regain momentum after posting disappointing results, and news of Stroll's arrival was met with a 19 per cent jump in the share price.
"I believe that this combination of capital and my experience of both the motor industry and building highly successful global brands will mean that, over time, we fulfil Aston Martin Lagonda's potential," Stroll, 60 said in a statement.
Stroll's fortune is estimated at US$2.6 billion, according to Forbes magazine. A longtime car lover, he owns the Mont-Tremblant circuit and has a large collection of Ferrari racing cars.
Aston Martin, now 106 years old, has seen better days.
"The past year has been a regrettably disappointing and challenging time for the company," said chief executive Andy Palmer.
"The difficult trading performance in 2019 resulted in severe pressure on liquidity which has left the company with no alternative but to seek substantial additional equity financing," said chairwoman Penny Hughes. "Without this the balance sheet is not robust enough to support the operations of the group."
On Jan. 7, the company warned that its 2019 profits would plunge more than 45 per cent from the previous year due to weak demand in Europe.
This report by The Canadian Press was first published Jan. 31, 2020.
The Canadian Press
Note to readers: This is a corrected story. An earlier version incorrectly stated the company plans to raise up to $1.7 billion.
