» » Aston Martin aims to steer round Brexit to $6.7 billion IPO

Aston Martin aims to steer round Brexit to $6.7 billion IPO

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The company, famous for creating a sports car under the management of the fictional secret agent James Bond, said that last month he planned to sell about 25 percent of his shares in the first initial public offering (IPO) by the British automaker for decades.

Booklet for IPO said on Thursday that the company has already received orders for all shares on offer. A source familiar with this issue said that it was at the bottom of the price range, valuing the company at a level of 4.02-5.07 billion pounds.

Aston Martin hopes to announce a final price for its shares around October 3 and expects it to go to the London Stock Exchange around October 8th.
Nevertheless, some analysts ask questions about the assessment that he is looking for.

Carmakers warn about any customs checks and fees that may arise as a result of Britain's departure from the European Union in March next year, may slow production and increase costs for the industry, which was one of the few successful stories in recent years in the country.

Chief Executive Officer Aston, who builds all of his cars in the UK, said the company increased its engine and component inventory in the event that free and free trade with the EU begins in a few months time.

"For example, we have up to five days of engine operation, and we have a very large warehouse in Wellsborn (in central England) where we have at least five days of vehicle stock," Andy Palmer said in an interview with Reuters, compared to with the previous three-day cost of components owned by the firm.

"If there are tariffs ... for every car that we lose because of a 10% tariff to Europe, we presumably choose Ferrari and Lamborghini in the other direction, because obviously their cars are becoming more expensive in the UK," said he.

But in its IPO prospectus, Aston warned that it could face "significant adverse effects" on sales and profitability if 18 percent of the sales it makes to the EU fall under restrictions.
Most of the company's suppliers are located in the EU, which means that restrictions on the movement of goods can also affect the production schedule and costs of the firm.

London and Brussels hope to conclude a Brexit agreement by the end of the year, but automakers are concerned that failure to reach a deal can lead to drastic cuts on highways and ports, disrupting trade.

Last week, Jaguar Land Rover boss Ralph Spett warned that the wrong Brexit deal could cost tens of thousands of jobs and risk production in the company, Britain's largest automaker.
Aston set the price range from 17.50 pounds to 22.50 pounds per share, as 25 percent of the shares it floats equates to a deal size of about 1.0-1.27 billion pounds.

Last month, the IPO involved the sale of shares to its main owners, Kuwaiti and Italian private joint-stock companies.

The caretaker underwent a negotiable plan, as Palmer took over in 2014, increasing production and expanding into new segments, with a new factory opened in 2019.

Palmer will receive an annual salary of £ 1.2 million after the IPO and will hold 0.6 percent of the company's shares, which he will be able to sell in stages over four years - a step that the company said showed long-term interests, management and shareholders will be agreed upon .

The central automaker in England sees the Italian brand Ferrari (RACE.MI), which made its debut on Wall Street in 2015 amid strong demand from investors as a model for imitation.
But some analysts are skeptical.

"The price of Aston Martin (AM) requires a high level of confidence in the company's plans," said Arndt Ellinghorst of Evercore ISI.

"We continue to note the extremely high level of capitalization of R & D ..., which increases margins and profits in the short term."

Palmer, however, said that investor interest was "unprecedented" so far, as he sets out on the road with the message that there is even more growth ahead.

"Investors tend to be" just one "investors, people understand that this is a growth story," he said, when asked what he will be meeting with. Such investors, as a rule, are institutions that often store shares for many years.

"The aircraft is halfway down the runway, but there is still half of the runway."

(1 dollar = 0.7606 pounds)


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