• Jan 24th 2009 at 1:06PM
  • 11
Aston Martin chairman David Richards has admitted that his company is in danger of a "technical breach of its banking covenants" sometime later this year. The situation could, technically, lead to the banks which financed the acquisition of the British sportscar-maker repossessing it.

Now we're not experts in finance. Not by any stretch of the imagination. So we couldn't tell you specifically what terms of the particular agreement between Aston's owners and its financial underwriters the company is in danger of breaching. But we take some comfort in the use of the contingent term "technical" in connection with the dire term "breach". At this point it would seem that the breach is only a possibility, not an eventuality, and that in such a circumstance the bank would have to be motivated to take control of the company. (We won't tell them if you don't.) But hopefully the Kuwaiti investors propping up Richards will work out a solution before it ever reaches that stage. Otherwise, Aston Martin could end up changing hands yet again.

[Source: The Sunday Times via WCF]

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    • 1 Second Ago
      • 6 Years Ago
      great... one of the few manufacturers with 100% desirable cars is going bankrupt...It would be cool if BMW bought them (since audi owns lambo and porsche owns audi)
      • 6 Years Ago
      Maybe the credit crunch was, after all, just an elaborate ploy by all those banks to own Aston Martin. Damn them!
      • 6 Years Ago
      The point that people are missing I think, is that many of us who observe the goings-on in the automotive industry, questioned Ford's sanity when it seemed that they "gave away" Aston Martin (to Richards and his bankers), Jaguar, and Land Rover (Tata) over the last two years.

      But there's another way to look at it; rather than continuing to bleed the Blue Oval dry, Alan Mulally actually salvaged some return on Ford's misguided PAG adventure, funds that were available to Ford to help retool their plants to start the production of European-designed products next year. If these painful yet necessary steps had not been taken -- along with reducing its stake in Mazda to raise cash -- Ford would most likely be in the same position as GM and Chrysler, rather than being the one company among the Detroit Three in the best position to survive this mess intact.

      Richard Truesdell
      Editorial Director, Automotive Traveler
      • 6 Years Ago
      Frankly speaking,
      If aston martin is not participate in 007 movie series, aston martin is already forget from people.

      There is no speciality in UK car.
      • 6 Years Ago
      Come on Jeremy Clarkson, let your money make you happy
      • 6 Years Ago
      2 things:

      I couldn't find who actually financed this deal, but most large banks are insolvent. The creditors of the bank might end up being the ones calling the shots. British banks are especially insolvent, and the pound is getting crushed, so I don't know if the British banks/ government (what's the difference now?) might not be able to afford AM.

      Second, AM was sold to a consortium including Kuwaiti investors. With oil prices off significantly, the oil exporting countries have their own cash crunch issues. They might want out of this deal. And the car market is oversupplied already. Things to think about.
      • 6 Years Ago
      Id like to see Aston Martin in British ownership.
      • 6 Years Ago
      Ideally, the bankers that would be doing the repossessing will own Aston Martins themselves (since, lets face it, that's who those cars are designed for) and they'll have some sympathy.
      • 6 Years Ago
      My local bank has vehicles in their parking lot, from time to time, that they have repossessed.

      What a Saturday morning find that will be! DBS repo FTW!!!
      • 6 Years Ago
      TurboTerro is on point here.

      I'm a finance lawyer and represent lenders on a regular basis. Calling something a "technical default" typically refers to the breach of some financial covenant in the loan agreement, but not a payment or other monetary default. Although any default would allow the lender to call the loan and exercise its remedies, in this case the lender will probably work with the borrower, waive the default, possibly modify some of the financial covenants for a limited period of time and collect a modification/waiver fee. The lender will also closely monitor the borrower's financial situation to make sure things are not getting worse. This is not a sign that Aston Martin or its owner is heading toward bankruptcy.

      Ned Nissly
      Harrisburg, PA