(Bloomberg) — Aston Martin Lagonda Global Holdings Plc Chairman Lawrence Stroll gives himself high marks for the turnaround he’s overseen so far.
His next orders of business: figure out how to speed up the process of hand-building what he calls the most complex car ever, and paying down debt.
The billionaire Canadian who came to the iconic British company’s rescue in early 2020, spoke with reporters Thursday before the unveiling of the AMR22, Aston Martin’s Formula 1 car for the upcoming season. Stroll talked up the automaker’s progress paring inventory and improving its cash position, which he said should help bring down interest costs in the coming years.
“I will be renegotiating the bonds at a more favorable rate, probably, and taking some cash to pay down” part of the debt, Stroll said. “This company will be cash-flow positive in 2023.”
In addition to injecting much-needed cash, Stroll forged closer ties with Germany’s Mercedes-Benz AG to put Aston Martin on steadier footing in the midst of the pandemic. In mid-2020, he hired Tobias Moers, who previously led Mercedes’s AMG performance-car business, as chief executive officer.
Aston Martin had net debt of 809 million pounds ($1.1 billion) at the end of the third quarter, and expects interest costs of 165 million pounds in 2021, it said in November. A year ago, the company raised $98.5 million in Senior Secured Notes due in 2025 with a 10.5% coupon. These notes come with a four-year call protection, meaning refinancing the senior debt will come with a penalty.
READ MORE: Aston Martin Faces Turbo-Charged Debt Costs After Weak Profits
Aston Martin may buy back some of the more expensive mezzanine bonds once the company generates cash, Stroll said, ruling out the need for any further capital raising.
“We don’t need any more money at all,” he said. “Let me be crystal-clear, black-and-white: we do not need money.”
Supercar Issues
While Aston Martin battled issues with complexity that delayed initial assembly of its £2.4 million Valkyrie supercars, Stroll said the project is now on track after technicians from his Formula One team were parachuted in to help.
“Everything has been resolved, but they’re taking a little longer to build than initially established,” Stroll said of the sold-out cars, adding that not a single customer had asked for their deposit back.
Last month, Aston Martin had warned that fourth-quarter earnings would take a hit after the company delivered fewer of the supercars than anticipated.
“The only thing I’ve disappointed on since I got here is the number of Valkyries that we said we were going to deliver last year, versus what we did,” Stroll said.
READ MORE: Aston Martin Struggles to Keep Its Turnaround Momentum Going
Mercedes will be a crucial partner as Aston Martin prepares to present its first battery-electric model in 2025. By 2026, all of the British brand’s new models will offer an electrified powertrain option, with Mercedes supplying hybrid and electric-drive systems.
Aston Martin also has held initial talks with Britishvolt Ltd., the U.K. government-backed battery company that last month signed a preliminary agreement with Group Lotus Plc.
While Stroll acknowledged some employees have left the carmaker since he took over, he said the company hired 370 new workers, roughly 170 of which are new engineers.
“We are going to have a separate, special sauce,” he said. “We’re going to have an EV platform that will make Aston Martin special.”
(Updates with additional comments starting in the 12th paragraph.)
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