F1 team to be sold by Aston Martin as firm goes private
Aston Martin is planning to remove itself from the London stock exchange and sell its flagship F1 team. The luxury sports car maker has signed a binding letter of intent to sell its stake in the Aston Martin Aramco Formula One Team.
It will make little difference to the race team as the company only owned 4.6% of it. But the sale of the F1 team will bring a cash injection of around £110 million to the struggling car manufacturer.
Aston Martin recently blamed American tariffs and an economic slowdown in China. It issued a profit warning, saying that the company will only just break even this year. Its forecast caused its share price to fall 7% in a day. That’s in addition to a dramatic loss suffered since the company first listed itself on the London Stock Exchange in October 2018. Following the move, it sold shares for £19, valuing the company at £4.33 billion. But shares are trading at just 71p for a company worth £826 million.
“Going private is being considered as a potential path forward,” Orwa Mohama, analyst at Third Bridge told CityAM. “Our experts say simplifying the ownership structure could improve agility, attract long-term partners, and reduce the administrative and financial burdens of public listing.”
Despite its financial difficulties, Aston Martin has a strong product portfolio. Its new Vantage, DB12, and Vanquish are all highly praised while its DBX SUV has made up around half of its sales in a very competitive segment of the market.
“Despite these challenges,” Mohama adds, “Aston Martin’s client base offers some insulation. Buyers in the ultra-luxury segment tend to be less sensitive to inflation and economic cycles, giving the company more pricing flexibility.”
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