Shares of the UK-based Aston Martin Lagonda Global Holdings PLC (GB:AML) were down by 2.63% on news that the company secured additional debt of £135 million to support its expansion plans for the second half of the year. The company stated that it raised these funds through a debt placement and will use them to enhance liquidity as part of its plan to increase sales volumes in the second half of the year.
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Aston Martin is renowned for its luxury sports cars and has a rich history of over a century. The company is known for its models like Vantage, DB11, DBS, DBX, and Valkyrie, among others.
More Details on Debt Placing
Aston Martin, through its subsidiary, Aston Martin Capital Holdings Limited, privately placed $90 million (£70.7 million) in 10.000% senior secured notes and £65 million in 10.375% senior secured notes. Both these notes are due in 2029.
The company will use these funds to settle debts under its current super senior revolving credit facility, clear its fees and expenses, and for general corporate needs.
Aston Martin’s H1 Results
Last week, Aston Martin announced its interim results for 2024, reaffirming its plans to increase sales volume in the second half. In the first half, revenue declined 11% to £603 million, while wholesale volumes declined by 32% year-over-year. The company’s loss before tax grew by 52% to £216.7 million.
Moving forward, the company expects high single-digit percentage growth in its wholesale volumes, which will drive EBITDA (earnings before interest, tax, depreciation, and amortization). The anticipated growth is expected to be primarily driven by the release of new models in 2024, including an updated Vantage, a V12 flagship Vanquish, and an enhanced DBX707.
Is Aston Martin a Good Stock to Buy?
On TipRanks, AML stock has received a Moderate Buy rating based on five Buys, two Holds, and one Sell recommendation. The Aston Martin share price target is 251.13p, which implies a huge upside potential of 69% from the current level.
