Thursday saw a roughly 22% increase in the price of Aston Martin’s (AML.L) stock following the luxury carmaker’s announcement of a 234 million pound investment from China’s Geely (0715.HK), which will make the automaker the company’s third-largest stakeholder.
The current largest shareholder in Aston Martin, Chairman Lawrence Stroll’s Yew Tree, will sell about 42 million ordinary shares to Geely for 335 pence each, and Geely will also subscribe for an additional 28 million shares at the same price.
The new issuance will net the British company cash proceeds of roughly 95 million pounds.
At 0727 GMT, Aston Martin shares, which ended on Wednesday at 231.2 pence, were trading as high as 279.4 pence.
The investment paves the path to ensure Aston Martin’s long-term future and enables the century-old company to reduce its debt. Aston Martin, the car of choice of fictional secret agent James Bond, has declared bankruptcy seven times in its history.
They give us a thorough understanding of the important strategic growth market that China represents, as well as the chance to use their assortment of technologies and parts, according to a statement from Stroll.
In September of last year, Geely, which owns a number of brands including Volvo (VOLCARb.ST), Polestar, Zeekr, and the British sportscar manufacturer Lotus, purchased a 7.6% interest in the Formula One team sponsor.
That followed the automaker’s rejection of Geely and the Italian investment firm Investindustrial’s plan to raise up to 1.3 billion pounds ($1.64 billion) in funds in July.
“Our decision to increase our shareholding in Aston Martin reflects our confidence in the company’s growth prospects, its technologies, and its management team,” stated Geely Chairman Eric Li.
In addition to receiving one board seat, the investment grants Geely a 17% ownership position in the business, placing it second only to Saudi Arabia’s Public Investment Fund (PIF).