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MOVE AFTER ITALY JV STAKE BUY

Aston Martin unveils $1bn investment plans

Kuwait, December 8, 2012

Aston Martin plans to invest $1 billion in new products and technology after Italian private equity fund Investindustrial agreed to buy a minority stake in the British luxury carmaker.

Investindustrial is buying 37.5 per cent for $241 million via a capital increase agreed with majority Kuwaiti owner Investment Dar, Aston Martin said yesterday.

The Italian group beat Indian tractor maker Mahindra and Mahindra in a two-way battle to invest in the company, whose sports cars were made famous by their appearance in James Bond spy films.

The cash injection will help Aston Martin better compete with Volkswagen's Bentley and rival UK luxury car manufacturer Jaguar Land Rover, which was bought by India's Tata Motors in 2008 and has since seen huge sales growth, especially in China.

The 99-year-old maker of the DB9 and Vanquish sports cars has struggled in recent years. Last week, it said it sold 2,340 cars in the nine months to September 30, 19pc down on 2011.

Investindustrial's senior principal Andrea Bonomi said the group hoped to transform Aston Martin in a similar way to its revamp of luxury Italian motorcycle maker Ducati by expanding Aston's model range and strengthening its global dealership network.

Owned by Italy's Bonomi family, Investindustrial bought Ducati in 2006 and sold it for about 860m euros last April to Volkswagen's Audi division.

Aston Martin said the deal would enable it to invest in new products and a technology programme up to 2018.

The British carmaker is owned by a consortium of Aston Martin chairman David Richards, Investment Dar and another Kuwait fund, Adeem Investment Company. US-based Ford, which sold Aston Martin to them for $770m in 2007, still holds a small stake.

Aston Martin said its shareholders' stakes "had been reduced accordingly" by the capital increase. Aston Martin makes its cars in Gaydon, Warwickshire, once part of England's motor manufacturing heartland.

The deal comes days after ratings agency Moody's put Aston Martin's non-investment grade B3 rating under review following a 16pc fall in the carmaker's third-quarter revenue.

The British company said the deal gave the group an enterprise value of £780m, compared with a value of £630m prior to the agreement.

It added that no agreement had been made on a technical partnership for Aston Martin with Daimler AG's Mercedes, as some analysts had expected.

Investindustrial expects to receive clearance for the deal from competition bodies in the first quarter of 2013.-Reuters




Tags: Investment Dar | Stake | Aston Martin | carmaker | Kuwaiti |

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