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LONDON, July 29 (Reuters Breakingviews) – Aston Martin (AML.L) is in an even tighter spot. The sports-car maker favoured by fictional British super-spy James Bond posted a pre-tax loss of 285 million pounds for the six months ended June 30, compared with a loss of 91 million pounds a year earlier. Executive Chairman Lawrence Stroll placed part of the blame on supply chain disruption. The 653 million pound capital raise announced this month will help. But the scale and direction of the losses suggests a bigger cash injection is required.
The problem for Stroll, who owns 22% of the company, was that a bigger raise would have bumped him from the top shareholder spot. Even under the current plan, Saudi’s Public Investment Fund will come close with a 17% holding. Knocking Aston Martin’s net debt down to around 600 million pounds is good news, especially as the firm was driving dangerously close to the limits on a revolving credit facility. But without serious investment in a revamp to catch up with rivals like Ferrari (RACE.MI) the losses will keep mounting. Investors hoping for a “Quantum of Solace” will be disappointed.
(By Dasha Afanasieva)
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own)
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