The results compounded the sense of malaise with the company citing lower vehicle pricing and higher costs of expansion. Since the day before its July 24 warning, its shares have more than halved.
The developments have put Aston Martin’s market valuation of 1 billion pounds ($1.2 billion) close to converging with its debt level of 723 million pounds ($883.8 million). To fix its issues, the company should consider a cut to its midterm outlook or increase funding with a rights issue of as much as 500 million pounds ($611 million), Bank of America Merrill Lynch said Tuesday.
The challenges may also see the company be approached by a strategic buyer, such as Investindustrial, one of Aston Martin’s largest shareholders, the bank said. Daimler AG also holds a small stake.
“If we require some additional financing from sources with which we’re familiar, particularly in the debt market to maintain that capacity, then that’s what we’ll go out and do,” CFO Mark Wilson said Wednesday on a call.
The results are another blow in the automaker’s struggle to convince investors that it can make the transformation from niche player to successful listed company, and deliver on a promise to take on supercar maker Ferrari.
Much of Aston Martin’s future will depend on the successful launch of the manufacturer’s first SUV model, the DBX, next year. The vehicle will be built at a new plant in St. Athan, Wales, and is crucial to reach a goal of lifting annual production to 14,000 vehicles by 2023. Last year, sales to dealers amounted to 6,441 vehicles.