Aston Martin has secured a new debt package worth $550 million from HPS, the private-credit arm of BlackRock. This financing includes a $450 million term loan and an additional $100 million facility, carrying an interest rate of approximately 10 percent. The company states this deal will increase its liquidity to $340 million and provide flexibility for future product development, despite facing years of losses and accumulating over $1.5 billion in debt. Shareholders in Aston Martin include Lawrence Stroll, Geely, and Saudi Arabia's Public Investment Fund.
Existing lenders, including hedge funds Arini Capital Management and Tresidor Investment Management, have expressed strong objections to this new debt package. They argue that the transaction breaches their borrowing terms by placing valuable assets, potentially including intellectual property rights and the Wales plant, beyond their reach. These creditors, who are owed over $1.3 billion, engaged US law firm Quinn Emanuel to challenge the deal and have proposed alternative financing solutions. They have even sent legal letters regarding the transaction.
The new funds from HPS were used to repay a $170 million revolving credit facility and part of a $50 million facility backed by chairman Lawrence Stroll. Earlier this year, Aston Martin also sold $50 million of Formula 1 branding rights to AMR GP Holdings, a vehicle indirectly controlled by Stroll, in which HPS holds a minority stake. This has led to questions from investors about whether such deals favor Stroll and lack transparency. During an earnings call, finance chief Doug Lafferty declined to provide further details on which assets were pledged, stating all information had been disclosed previously. This lack of transparency has drawn criticism from credit investors, with one high-yield portfolio manager calling the opacity "completely ludicrous."
