Aston Martin Lagonda has set pricing for its £575.8m rights issue at a 42.3% discount to the theoretical ex-rights price despite launching with considerable shareholder commitments.
The rights issue is part of a £653.8m capital increase that will bring in Saudi Arabia's Public Investment Fund as a major shareholder.
The carmaker is raising £78m from a placing of 23.3m shares to PIF at 335p each, a 9.8% discount to the share price on July 14 before the raise was announced. That will give PIF a 16.7% stake.
The rights issue will see 559m shares offered on a heavy 4-for-1 basis at 103p apiece, representing a steep discount to the TERP of 178p based on a September 2 close of 480p.
Lawrence Stroll with his Yew Tree Overseas consortium and Mercedes-Benz are subscribing in full in proportion to their post-placing holdings of 18.3% and 9.7%, respectively. PIF will also subscribe in full.
Those commitments cover 44.7% of the rights issue, with the rest underwritten by Barclays and JP Morgan as joint global coordinators, and joint bookrunners Credit Suisse and Deutsche Bank.
One banker involved reported good support from shareholders since the fundraising was announced but said that the management team had been marketing to both existing and potential investors, meaning there may be some turnover in the register.
A second banker predicted some institutions would build their investment given the de-risking on the balance sheet and acceleration of capex plans.
Around half the proceeds will be used to reduce debt and the balance will support Aston Martin's capex plans of around £300m per year that in part will focus on a pipeline of hybrid and fully electric vehicles.
Costs of the rights issue are estimated to be £25m, including a 3% underwriting fee for the banks.
Rights trading and subscription will begin on September 12 and subscription closes on September 26. Any rump will be placed the following day.
Shares in the company fell 15.6% on Monday to 405p and are now down 70% this year.
Aston Martin’s fundraising comes as European carmaker Porsche prepares to launch its IPO as soon as Tuesday or Wednesday.
Those involved in Aston Martin’s offer reported little concern over potentially having a rump placement in the market at the same time as Porsche.
The Porsche deal could be around €10bn with a market cap of €60bn–€80bn.