Carmaker Aston Martin affirms China's Geely doubles stake from 7.6%
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The carmaker has seen its shares surge 72 percent since the beginning of this year in a remarkable turnaround.
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An Aston Martin logo seen at a dealership in central London, Britain August 29, 2018 (Reuters)
One of the UK's most prestigious auto companies, Aston Martin Lagonda said, on Thursday, that Chinese automaker Geely has more than doubled its share in the British luxury manufacturer, making it the third largest investor.
In a statement, Aston said Geely will invest $291 million under a new partnership lifting its holding to 17%, up from a 7.6% stake it purchased in September.
The deal, which aims to break into the massive Chinese market, places Geely as the third largest investor after Canadian tycoon Lawrence Stroll and Saudi Arabia.
Following a cash investment from its national wealth fund, Saudi Arabia became the second-largest investor last year.
The "substantial investment from Geely" was "part of a new relationship agreement that seeks to support Aston Martin's growth and vision to be the world's most desirable ultra-luxury British performance brand," Aston stressed.
The announcement pushed its share price up 14.5% to 264.80 pence on London's surging stock market on Thursday.
The carmaker has seen its shares surge 72% since the beginning of this year in a remarkable turnaround.
It is worth noting that Aston Martin suffered huge losses in 2019 as it crashed spectacularly on weak global demand.
Losses widened significantly as a result of the coronavirus epidemic.
However, Canadian businessman Stroll saved the company from bankruptcy in early 2020.
The luxury company is now planning to transition to all-electric vehicles by 2025.
"This (Geely) announcement is a further significant step towards delivering our ambition for Aston Martin," added executive chairman Stroll in Thursday's statement.
"Geely Holding... sees tremendous potential for Aston Martin's long-term growth and success."
Stroll added, "They offer us a deep understanding of the key strategic growth market that China represents as well as the opportunity to access their range of technologies and components."
The Chinese conglomerate will also acquire a member on the board and has committed not to increase its shareholding by over 22% until August 2024.
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