All posts in “Earnings/Financials”

Aston Martin ties up with Lucid, extends deal with Mercedes-Benz

Aston Martin Lagonda Global Holdings is tying up with Lucid Group Inc. on electric vehicle technology, uniting the storied British carmaker and relative automotive newcomer both backed by Saudi Arabia’s sovereign wealth fund.

Aston Martin will pay $232 million in shares and cash to Lucid in exchange for battery-electric powertrain components, the companies said Monday. The UK manufacturer also extended a years-long cooperation with Mercedes-Benz Group AG, though it will no longer issue more stock to the German carmaker that already owns a roughly 9% stake.

The announcements sent Aston Martin shares soaring as much as 15%, their biggest intraday jump in over a month, while Lucid advanced as much as 9.1% in premarket US trading.

“The proposed supply agreement with Lucid is a game changer for the future EV-led growth of Aston Martin,” Chairman Lawrence Stroll said in a statement.

Stroll, 63, is three years into an effort to turn around the 110-year-old British manufacturer with a long history of financial trouble. Aston Martin has needed several capital raises since he rescued the company in early 2020, the most recent of which made China’s Zhejiang Geely Holding Group Co. and Saudi Arabia’s Public Investment Fund major shareholders.

The Public Investment Fund, or PIF, owns about 49% of Lucid and 18% of Aston Martin, according to data compiled by Bloomberg.

Aston Martin’s longstanding financial woes have made it increasingly reliant on partners for technology that other automakers consider core to their products. Models including the DBX sport utility vehicle and DB12 sports car are powered by Mercedes engines.

While Mercedes will continue to provide access to powertrains and electric architectures for current and future Aston Martin vehicles, Aston Martin will pay in cash rather than shares as previously planned.

An Aston Martin spokesman said Lucid’s technology is available now, whereas Mercedes’s AMG electric platform isn’t accessible until late 2025.

The deal with Lucid — which has been producing its lone EV, the Air sedan, since September 2021 — will help Aston Martin toward its ambitious electrification targets. The UK carmaker plans to launch its first plug-in hybrid supercar, the Valhalla, early next year and its first battery-electric vehicle in 2025. By the following year, all new product lines will have an electrified powertrain option.

Aston Martin said it will make phased cash payments to Lucid totaling $132 million and has committed to spending at least $225 million on the EV maker’s powertrain components. Aston Martin also will pay another $10 million to Lucid for integrating its technology into its vehicles.

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June 26, 2023 / Comments Off on Aston Martin ties up with Lucid, extends deal with Mercedes-Benz
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De Tomaso supercar revival hits speed bump with lawsuit against founder

A planned revival of Italian sports car brand De Tomaso as a maker of $1 million supercars appears to have hit a speed bump with lawsuit against the founder by the former chief executive officer.

Ryan Berris, who joined De Tomaso Automobili Holdings NA in 2014 as CEO and lead developer of its planned P72 supercar, sued the company and its founder, Hong Kong financier Norman Choi, on Wednesday in Manhattan federal court. Berris claims he was fired last year because he stood in the way of Choi’s plans to move forward with a blank-check merger based on false information.

“Choi became obsessed not with making the perfect automobile to resurrect De Tomaso and to serve the company’s discerning clients, but instead with trying to take the company public through a bogus SPAC process,” Berris said in the complaint.

Berris claims he’s owed hundreds of thousands of dollars in compensation and a 10% stake in the company that was once valued at as much as $1.5 billion.

The press office for De Tomaso didn’t immediately respond to a request for comment. Choi couldn’t immediately be reached for comment.

De Tomaso, best-known for the Mangusta and Pantera sports coupes it introduced in the 1960s and 1970s, filed for bankruptcy in 2004. Rights to its name were eventually acquired by Choi and a partner in 2014.

According to Berris, Choi reached out to him shortly thereafter, and the two met at a racetrack in Spain. At the time, Berris was working for Scuderia Cameron Glickenhaus (SCG), a US manufacturer of high-performance racing and road cars whose SCG007 hypercar would go on to take the podium at Le Mans in 2022.

“Desperate to avoid failure, Norman Choi pleaded with Berris to take over the company and create a world-class, credible revival of the famed De Tomaso brand,” Berris’s lawyers at Boies Schiller Flexner LLP wrote in his complaint.

Berris says he agreed and went on to develop the P72, which was unveiled at the 2019 Goodwood Festival. An homage to the De Tomaso P70, a 1965 legendary prototype co-developed by Alejandro De Tomaso and Carroll Shelby, the new car with a $1 million base price proved a sensation and, within a few days, received more legitimate purchase inquiries than the planned 72-unit limited run, according to the suit. 

May 27, 2023 / Comments Off on De Tomaso supercar revival hits speed bump with lawsuit against founder
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McLaren sells historic cars to raise cash to fund Artura upgrades

Cash-strapped McLaren Holdings Ltd. has recently sold some of its prized heritage car collection to Bahrain’s sovereign wealth fund Mumtalakat Holding Co. to raise capital. 

The supercar maker was forced to seek an injection of funds after identifying “certain technical upgrades” on its Artura hybrid supercar that triggered delivery delays, McLaren said earlier this week during its third-quarter earnings. Its main shareholder — with Mumtalakat owning a near 60% stake — agreed to support the company with an additional £100 million ($123 million), the company said. 

A McLaren spokesman confirmed the sale of some heritage vehicles to the company’s main shareholder in return for the cash infusion, without elaborating on the details of the cars sold. 

McLaren’s heritage vehicles count 54 rare Formula 1 racing cars and F1 supercars, according to its 2021 annual report. The same report states that the company sells cars from its collection from time to time. 

“We are in active talks with all shareholders regarding a recapitalization of the group,” McLaren said on the call, indicating the additional funds won’t be enough. It’s also continuing talks for potential partnerships. 

McLaren reported a loss of £203 million in the nine months through September, compared with a £69 million loss a year ago. Liquidity at the end of the third quarter declined to £87 million, down from £171 million. 

The British marque has sought emergency financing multiple times over the past few years from shareholders amid long delays in the launch of the Artura. The latest round of fundraising comes just months after its shareholders — which also include investment firm Ares Management Corporation and Saudi Arabia’s Public Investment Fund — gave £125 million through convertible preference shares.

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December 3, 2022 / Comments Off on McLaren sells historic cars to raise cash to fund Artura upgrades
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Ferrari lifts profit forecast after strong Q3, keeps cautious stance on margins

MILAN — Luxury sports car maker Ferrari said on Wednesday it was improving its forecasts for full-year results, including for core earnings, after beating expectations in the third quarter, supported by a double-digit increase in shipments.

The company however struck a more cautious tone on the margin on those core earnings, now seen at around 35% for this year, versus a previous guidance of over 35%.

It said industrial costs and research and development expenses increased in the past quarter mainly due to higher depreciation and amortization and cost inflation.

Ferrari said its adjusted earnings before interest, tax, depreciation and amortization (EBITDA) would grow this year to over 1.73 billion euros ($1.71 billion), versus an already improved forecast of 1.70-1.73 billion euros it provided three months ago.

After briefly turning positive following the release of the results, Milan listed shares in Ferrari fell as much as 2.4%. By 1235 GMT they were down 1.4%.

In the third quarter, adjusted EBITDA rose 17% to 435 million euros, topping analyst expectations of 418 million euros, according to a Reuters poll.

($1 = 1.0107 euros)

(Reporting by Giulio Piovaccari; Editing by Keith Weir)

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November 2, 2022 / Comments Off on Ferrari lifts profit forecast after strong Q3, keeps cautious stance on margins
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Audi denies McLaren purchase report

BERLIN — Early Monday morning, Audi denied reports that the company was closing a deal to purchase McLaren, leaning on a previous statement saying that the company is continuously looking at different ideas for cooperation and saying that the rumor of a completed purchase was “wholly inaccurate.”

“As part of our strategic considerations, we are constantly looking at various cooperation ideas,” an Audi spokesperson said in response to an earlier Autocar report that indicated a deal to purchase the supercar manufacturer was in the works to help the company secure a Formula 1 team. The report cited a source who said Audi had taken over the British sportscar maker. 

“McLaren’s technology strategy has always involved ongoing discussions and collaboration with relevant partners and suppliers, including other carmakers, however, there has been no change in the ownership structure of the McLaren Group,” Audi said. 

McLaren later joined Audi in denying the story, using a statement saying, “McLaren Group is aware of a news media report stating it has been sold to Audi. This is wholly inaccurate and McLaren is seeking to have the story removed. McLaren’s technology strategy has always involved ongoing discussions and collaboration with relevant partners and suppliers, including other carmakers, however, there has been no change in the ownership structure of the McLaren Group,” the spokesperson said.

Audi said to Reuters it was “looking at various cooperation ideas” but neither confirmed nor denied whether it was in discussion with McLaren about a possible sale.

McLaren CEO Mike Flewitt announced in October that he would be step down after eight years leading the financially troubled company, which is now searching for a successor. 

This article contains reporting by Reuters.

November 15, 2021 / Comments Off on Audi denies McLaren purchase report
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Rimac inks deal to purchase 55% of Bugatti from VW Group

ZAGREB, Croatia — Croatian electric supercar builder Rimac is taking over the iconic French manufacturer Bugatti in a deal that is reported to be worth millions of euros.

Rimac said Germany’s Volkswagen Group, including the Porsche division — which owns a majority stake in Bugatti — plans to create a new joint venture. The new company will be called Bugatti-Rimac.

Rimac Automobili announced Monday that it will be combining forces with Bugatti to “create a new automotive and technological powerhouse.”

Rimac has progressed in 10 years from a one-man garage startup to a successful company that produces electric supercars. Mate Rimac, who founded the company in 2009, says the venture is an “exciting moment” and calls the combination of the companies “a perfect match for each other.”

Porsche will own 45% of Bugatti-Rimac while Rimac Automobili will hold the remaining 55% stake, according to Croatian media reports. Financial details of the deal were not published.

Bugattis will continue to be assembled in eastern France, where the company was established in 1909. The vehicles will use engines developed and made in Croatia.

“In an industry evolving at ever-increasing speed, flexibility, innovation and sustainability remain at the very core of Rimac’s operations,” the company said. “Uniting Rimac’s technical expertise and lean operations with Bugatti’s 110-year heritage of design and engineering prowess represents a fusion of leading automotive minds.”

July 5, 2021 / Comments Off on Rimac inks deal to purchase 55% of Bugatti from VW Group
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Aston Martin sues dealer over $3.5 million Valkyrie supercar

Aston Martin Lagonda Global Holdings said it’s suing a company affiliated with one of its dealers in Switzerland, alleging that it withheld customer deposits collected for the $3.5 million Valkyrie supercar.

The automaker accused Nebula Project AG of failing to pass some deposits taken from customers along to Aston Martin and said it has terminated an unconventional commercial arrangement its previous management team entered in 2016. Under the now-dissolved deal, Nebula had agreed to fund development of the Valkyrie and other mid-engine cars in exchange for royalty payments.

As a result of terminating the agreement with Nebula, Aston Martin is no longer liable for any potential royalty payments, which could have been “significant” over time, the carmaker said in a statement Tuesday. The company also cut off its dealer arrangements with AF Cars AG, the company that operates Aston Martin St. Gallen in Switzerland, whose board members manage Nebula.

A spokeswoman for the cantonal prosecutor’s office in St. Gallen said they are expecting a lawsuit to be filed but hadn’t received it as of noon Tuesday. A spokesman for Aston Martin St. Gallen was not immediately available to comment, according to a receptionist.

The canton of St. Gallen in eastern Switzerland is home to just 510,000 people but generates gross domestic product of almost 39 billion Swiss francs ($42 billion), making it a natural fit for wealthy fans of supercars. The Valkyrie, which Aston Martin expects to start shipping in the second half of the year, is intended to compete with mid-engine models made by the likes of Ferrari and McLaren.

While Aston Martin believes the net impact of its actions against Nebula will be positive over time, it’s expected to reduce cash flow and earnings before interest, taxes, depreciation and amortization by as much as 15 million pounds this year. The automaker’s shares traded down 1.9% as of 11:50 a.m. in London, paring an earlier decline of as much as 4.9%.

Valkyrie customers will still receive their cars as scheduled, Aston Martin said, despite the company not having received all the deposited funds. The company said it will take deposits for special vehicles directly from customers going forward instead of through dealers.

Aston Martin racked up significant losses after going public in 2018 and has spent the last year restructuring itself after a rescue by Canadian billionaire Lawrence Stroll, who took over as chairman. The 61-year-old fashion mogul has injected much-needed cash and forged closer ties with Daimler AG’s Mercedes-Benz to ensure the company survives tumultuous times for the auto industry.

June 22, 2021 / Comments Off on Aston Martin sues dealer over $3.5 million Valkyrie supercar
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Rimac reportedly planning stock IPO as it draws closer to Bugatti

FRANKFURT — Croatian electric hypercar maker Rimac is exploring several options for its future, a spokesperson for the group said in response to a report outlining plans for an initial public offering next year.

Germany’s Manager Magazin reported that Rimac, in which Volkswagen’s Porsche unit owns a 24% stake, was planning an IPO in 2022 at a valuation of 5 billion euros ($6.1 billion), without disclosing where it obtained the information.

“As for going public, we’re considering different options, but it hasn’t been decided which direction we’ll go in,” the Rimac spokesperson said.

Rimac has developed an electric supercar platform which it supplies to other carmakers, including Automobili Pininfarina.

It is currently working on a strategic partnership with Volkswagen unit Bugatti, which will likely result in a joint venture between Porsche and Rimac, with Porsche as a minority partner, Volkswagen CEO Herbert Diess said in March.

“The future of Bugatti is an issue that will be decided on a group level,” Porsche said in a statement, declining to comment further.

Porsche boss Oliver Blume earlier this year said intense discussions on Bugatti’s future were ongoing and that Rimac could play a role as the brands were a good technological fit, adding that a decision was expected in the first half of 2021.

Earlier this month, Rimac revealed the 1,914-horsepower Rimac Nevera.

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June 17, 2021 / Comments Off on Rimac reportedly planning stock IPO as it draws closer to Bugatti
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McLaren sells its Woking, England, headquarters for $236 million

McLaren has found a buyer for its headquarters in Woking, England. It sold the facility to a New York-based investment firm named Global Net Lease, but it’s not planning on moving to a new home anytime soon.

Hit hard by the ongoing coronavirus pandemic, the British firm put a “for sale” sign on its lawn in September 2020 with a major catch: The new owner would need to lease the facility back to McLaren in the foreseeable future. Canadian real estate firm Colliers listed the carmaker’s headquarters at £200 million (around $256 million at the time), and Global Net Lease announced it haggled the price down to £170 million, which represents about $236 million.

The deal includes the McLaren Technology Center, the McLaren Production Center (which manufactures road cars, like the GT), and the McLaren Thought Leadership Center. Parking lots and a small man-made lake are part of the transaction, too. Moving everything to a new location would be immensely expensive, not to mention time-consuming, so McLaren will lease the 840,000-acre site from Global Net Lease for the next 20 years. What happens after that isn’t known yet; McLaren will presumably either sign another multi-year lease or buy the site back.

This is the second time McLaren has received a nine-digit cash injection in less than a year. In June 2020, it arranged a £150 million round of financing from the National Bank of Bahrain. At the time, it said the funding would allow it to get through the coronavirus crisis while putting it in the best possible position to be competitive in the future. 

McLaren’s sale of its headquarters isn’t unprecedented in automotive history. In 2012, PSA Peugeot-Citroën (which is now part of Stellantis) sold its historic headquarters on Avenue de la Grande Armée in the heart of Paris for about $327 million to raise much-needed cash; it still leases the building in 2021. And, in January 2004, troubled British carmaker MG Rover sold most of its Longbridge, England, site to a property developer with plans to rent it. It signed a 35-year contract, and it optimistically added a renewal clause, but it shut down in April 2005 after years of losses.

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April 21, 2021 / Comments Off on McLaren sells its Woking, England, headquarters for $236 million
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UPDATE: Porsche could raise its stake in Rimac, and Rimac weighs in

CLARIFICATION: An earlier version of this Reuters story said Porsche could raise its stake in Rimac to nearly 50%, but Rimac reached out to Autoblog to say that’s not so. Here is a statement from Mate Rimac:

“We have a very strong partnership with Porsche that is key for Rimac Automobili. Porsche is a shareholder in Rimac since 2018 with 15.5% ownership currently, accumulated over several rounds of investment. While it is true that we are discussing further expansion of this collaboration that will lead to increase of Porsche’s stake in Rimac Automobili, some media have mistakenly reported that Porsche would take over 50% or nearly 50% of the company.

We are very happy that the partnership with Porsche will strengthen even further, but it is in the interest of both Rimac and Porsche that Rimac is a fully independent company. We are working with many car companies that are not our shareholders and there is a clear separation between shareholding and projects. It is very important to us that our industry customers have the peace of mind that Rimac is independent and that there is an “Information Firewall” between projects and shareholders (not only Porsche, but also Hyundai and others) – and this will not change. Confidentiality is very valued in the industry and one of the basics for collaboration between companies. Our shareholders are happy with such an arrangement and expect the same level of professional behaviour and confidentiality for their projects and customer projects.

So, the point is: Porsche’s stake will increase but nowhere near to 50% and Rimac will remain independent with many industry customers that are not our shareholders/investors.”

The original story, with the 50% reference removed, appears below.

FRANKFURT — Volkswagen unit Porsche is participating in a financing round of Rimac Automobili that will see the electric supercar maker raise 130 million-150 million euros ($157 million-$181 million), its owner Mate Rimac told weekly Automobilwoche.

The fundraising should be completed in two to three months and another round is planned at the end of the year, Rimac told the trade journal.

Porsche owns a 15.5% stake in Rimac Automobili and could raise its stake in a deal that would also include the transfer of Volkswagen’s supercar brand Bugatti to Rimac, Automobilwoche said.

Volkswagen and Rimac were not immediately available for comment on Sunday.

Porsche Chief Executive Oliver Blume said earlier this month that intense discussions on Bugatti’s future were ongoing and that Rimac could play a role as the brands were a good technological fit, adding that a decision was expected in the first half of 2021.

Rimac has developed an electric supercar platform, which it supplies to other carmakers, including Automobili Pininfarina.

“Supercars have a limited market, the market for components is much bigger. That is why we are planning to expand our company,” Rimac told Automobilwoche.

That includes plans to more than double Rimac Automobili’s workforce by early 2023 to 2,500 from 1,000 currently, he said.

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February 28, 2021 / Comments Off on UPDATE: Porsche could raise its stake in Rimac, and Rimac weighs in
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