Aston Martin Aims for $6.7-billion IPO

Luxury British carmaker Aston Martin is aiming for a valuation of up to 5.07 billion pounds, or $6.7 billion, from its stock market flotation and has done some steps in preparation for an eventuality over Brexit, it stated on Thursday.

The British automobile company, which is famous for making sports car driven by equally famous fictional secret agent James Bond, said last month that it was pursuing an initial public offering (IPO), the first British carmaker to do so for decades.

The automaker will publish a prospectus later on Thursday with a view to announce its final pricing on or around October 3. It believes that it shares will be admitted to the London Stock Exchange on or around October 8.

Carmakers have cautioned the impact of any customs check introduced as a consequence of a no deal or hard Brexit that could slow down production and hike costs when Britain finally pull out of the bloc in March 2019.

The big boss of Aston, which manufactures all of its cars in Britain, stated that the company had boosted its stock of engines and components in case free and unfettered trade with the European Union ends in a few months’ time.

“We’re up to five days of engine stock for example and we’ve got a very large warehouse in Wellesbourne (in central England) where we have at least five days of car stock,” chief executive Andy Palmer said to reporters. This was an increase from the previous three days’ worth of components held by the firm.

“If there are tariffs… for every car we lose because of a 10 percent tariff into Europe, we presumably pick up from Ferrari and Lamborghini in the other direction because obviously their cars become more expensive in the UK,” he explained.

London and Brussels aim to seal a Brexit agreement by the end of the year but peers and fellow carmakers such as BMW and Jaguar Land Rover are concerned that the failing to come up with a deal could result to snarl-ups at motorways and ports disrupting production.

JLR boss Ralf Speth cautioned last week that the wrong Brexit deal could translate to sacrificing tens of thousands of car jobs and risk production at the company, which is Britain’s biggest carmaker.

Aston, which sports a set price range  of 17.50 pounds to 22.50 pounds per share for the 25 percent of stock it is floating , is looking for a market capitalization of between 4.02 and 5.07 billion pounds.

The carmaker, which has long said that it could push through a listing, has been undergoing a turnaround plan since Palmer rose to power in 2014 as it boosts its volumes. It is also expanding into new segments, having a new factory that is set to open in 2019.

Palmer said that investor interest had been “unprecedented” so far as he hits the road to tap into demand with his message that there is more growth to come.

“The tendency of the investors are ‘long only’ type investors, people that understand that this is a growth story,” he said. “The aeroplane is half way down the runway but there’s still half the runway to go.”

HQBroker is here to give you a daily news roundup about the forex, commodities, technologies, automobiles, and economies. You can open an account now and make yourself updated with essential news in the market. Share your thoughts and experiences with us by commenting your HQBroker reviews.