Yew Tree Backs Aston Martin With £52.5 Million as Carmaker Plans Formula 1 Stake Sale

British luxury carmaker Aston Martin is preparing to sell its stake in the Aston Martin Aramco Formula 1 team as part of a wider strategy to stabilise its financial footing. The move follows an announcement that the Yew Tree Consortium, led by executive chairman Lawrence Stroll, will inject £52.5 million into the company, further increasing its ownership stake.

While the consortium said the transaction would enhance Aston Martin's liquidity by over £125 million, the announcement arrives amid mounting losses and growing pressure from potential US tariffs on imported automotive brands—posing additional threats to one of the UK's most iconic motoring names.

Yew Tree Tightens Its Grip on Aston Martin

As part of the investment, Aston Martin will issue 75 million new shares to the Yew Tree Consortium at 70p per share. This latest round of funding will increase the consortium's stake in the business from 27.67% to 33%, per Reuters.

Under UK regulations, crossing the 30% threshold would typically trigger a mandatory takeover bid. However, Aston Martin is seeking a waiver from the Takeover Panel, subject to approval from independent shareholders.

Lawrence Stroll said the Yew Tree Consortium has invested nearly £600 million in Aston Martin since 2020 and that this latest injection reflects continued confidence in the marque.

'Now five years into Aston Martin's transformation, I remain highly confident about the company's medium-term prospects, having re-positioned the company as one of the most desirable ultra-luxury high-performance automotive brands,' Stroll said. 'The coming years will be pivotal in realising our vision and ambition.'

Formula 1 Stake Sale Aims to Unlock Liquidity

In tandem with the investment, Aston Martin is preparing to sell its minority stake in AMR GP—the Formula 1 outfit it co-owns—featuring drivers Fernando Alonso and Lance Stroll, the chairman's son. The company aims to secure a premium over the stake's combined book value of £74 million.

The carmaker currently holds the shares through a combination of warrant exercises and reward shares from its sponsorship arrangement. Aston Martin is also exploring the early exercise of additional warrants, originally set to expire in 2031, to include them in the sale. As of 31 December 2024, the existing stake was valued at £50.9 million, with the additional shares valued at £23.2 million.

'Today's proposed investment, priced at a premium to the market price, and the forthcoming proposed sale of the Aston Martin F1® Team shares owned by Aston Martin at a premium to book value, is expected to generate significant additional liquidity for the Group, of over £125 million,' Stroll noted.

He added: 'With a long-term sponsorship agreement cementing the existing relationship between Aston Martin and the Aston Martin F1® Team, our brand will remain present and competing at the pinnacle of motorsport for many years to come.'

Financial Pressures Mount Amid Global Headwinds

The strategic realignment comes as Aston Martin continues to grapple with substantial financial headwinds. The US market, which accounts for roughly 30% of its sales, poses a serious challenge in light of new tariffs on imported vehicles. The company estimates a £30 million hit to its gross profit due to the proposed 25% levy, according to the Financial Times.

Beyond trade policy, the company has struggled with ongoing supply chain issues, leading to production delays and a reduction in its 2024 wholesale target by around 1,000 vehicles. Softened demand in China has also contributed to a recalibration of its sales forecasts.

2024 Performance and Outlook

Aston Martin's 2024 results paint a mixed picture. The company reported a 3% year-on-year revenue decline to £1.58 billion, with total wholesales down by 9% to 6,030 units. However, the average selling price rose by 6% to £245,000, underscoring a continued focus on higher-margin, ultra-luxury models.

Despite this, the company posted an adjusted pre-tax loss of £255.5 million for the year ending 31 December 2024, up from £171.8 million the previous year.

With new funding secured and a potential cash injection from the Formula 1 stake sale, Aston Martin is aiming to bolster liquidity and push forward with the development of its next-generation vehicles. Whether these moves will be enough to shield the brand from continued market pressures and restore profitability remains to be seen.