Moody’s puts Aston Martin under review for a credit downgrade

Article by Christian Andrei, on December 5, 2012

Moody's Investors Service has placed Aston Martin under review for a credit downgrade as it runs through its cash reserves. Aston Martin is the luxury-car maker controlled by Investment Dar Co. of Kuwait. In a statement, Moody's said that it may lower Aston Martin's non-investment grade B3 rating, which is defined as having "high credit risk," after it posted negative free cash flow in the third quarter.

Moody's analyst Falk Frey said that the review was prompted by a considerable decline in the liquidity profile of Aston Martin as of the end of September 2012, as the result of a weakened cash generation and operating performance in the third quarter. On Nov. 28, company spokeswoman Janette Green said that Aston Martin is in "advanced" talks to sell new shares to investors to increase funding and guarantee that it can pursue growth plans.

Moody's said that if capital is increased, there would be a "material positive" impact on its finances. Sources said last week that Aston Martin got separate bids from Investindustrial and Mahindra & Mahindra Ltd. for 50% of the sports-car maker. The sources added that an offer of slightly below 250 million pounds was submitted by Investindustrial, a European private-equity fund based in London.

However, Indian automaker Mahindra made a higher bid. An insider said last week that whichever company wins during the bidding will receive 50% of voting rights and a 40% equity stake. It was also reported that the Mahindra bid may be higher but then, Investindustrial is planning to use technology and car components from AMG, the Mercedes-Benz unit that produces high-performance models.

Aston Martin continues to get its engines from Ford but it isn’t anymore able to access Ford's other resources after it was sold. This means that it’s the only global luxury brand that is not a part of a larger auto group. In 2007, Investment Dar paid 503 million pounds to purchase Aston Martin from Ford.

Topics: aston martin

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Ford has just recently unveiled the 2018 Ford Mustang, and as it turned out, the carmaker gave its beloved pony car a facelift. There have been mixed reactions about the...
by - January 19, 2017
The bidding war for one of the only 20 examples -- 21 actually, but the 00 version went to a museum -- of the classically beautiful Lamborghini Reventon built and...
by - January 18, 2017
Bentley once again confirmed its plans to push PHEV into their future lineups. As a matter of fact, the Bentayga SUV will be the first to have the plugin hybrid...
by - January 18, 2017
Each time that Mini launches a new generation of the Countryman crossover, a John Cooper Works performance version is always expected to follow. When Mini unveiled the next-gen 2017 Mini...
by - January 18, 2017
Ford Mustang customers won’t be able to specify the V6 powerplant for the latest iteration of the carmaker’s pony car. This comes as the new 2018 Ford Mustang is saying...
by - January 18, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries