• Sep 29th 2009 at 10:29AM
  • 22
Is Aston Martin on the brink of insolvency? Britain's Guardian is reporting that the Kuwaiti fund that owns half of Aston is having trouble refinancing the debt it's incurred during the recent global economic crisis. It hasn't help that the fund failed to report its 2008 financial records on time and subsequently had trading halted on its shares. All isn't doom and gloom, however. Kuwait's Investment Dar says that it recently inked a deal that will at least buy it some time in working out a new plan to get out of its mess, but oil prices just aren't what they used to be, and money is hard to come by – even for wealth funds.

When Ford sold Aston Martin in March of 2007, times were better for the consortium that bought David Brown's legacy. Along with ex-racer Dave Richards, banker John Singers and Adeem Investment, Investment Dar bought the Bond-ride firm for $925m (£480m). Fast forward to late 2008 and Investment Dar was itself trying to borrow $1B (£630m) to refinance debt, and iteven defaulted on a $100m Islamic bond in April. So, the Dar finds itself in a position of having to keep its creditors at bay while it seeks to right the ship. The agreement they've reached now is known as a standstill agreement. That means creditors won't make any new individual claims for a while. The arrangement will continue until the end of the year and hopefully Aston Martin will survive the financial storm.

[Source: The Guardian]

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    • 1 Second Ago
      • 5 Years Ago
      pish posh. They'll be fine.
      • 5 Years Ago
      Dateline: September 29, 2009, 8:27pm in an office building somewhere in Kuwait.

      Phone rings.

      Secretary pics up.

      Secretary: "Mr. Singers, there's a call for you from Germany. He says his name is Ferdinand Peich..."
      • 5 Years Ago
      noooo! i love aston martins. they give us beautiful cars not matter which model.
      • 5 Years Ago
      I'm too lazy to look it up, but do brands like Aston Martin ever run in the black, or are they more or less just status holdings for whatever company happens to write the checks? I know Porsche has had periods of out-and-out profitability, but what about Lamborghini or Ferrari?

      VW/Bugatti loses money on the Veyron, of course (next time someone asks, "why the hell would anyone buy a $1.2m car?" reply, "because they're getting it at a $7.7m discount"), but Aston makes real bread-and-butter supercars that aren't out in the stratosphere in terms of development costs so I'd be interested to know what kind of operating margin they work with.

      It's such an interesting market to consider because we're talking about millions upon millions of dollars that go into designing, manufacturing, assembling and marketing luxury products that don't present a real value proposition to investors, and yet they soldier on despite decades of unprofitability and constant changes of management/owndership. It makes you wonder how some of these marques have even managed to hang around as long as they have.

      I can see Mercedes selling a car like the SLR because it probably actually does translate to moving some AMG models, and perhaps even base SLKs. R8s sell A3s, M6s sell 335is, and LF-As, or whatever they end up being called, will no doubt sell IS350s. But did a DB9 ever sell a Focus? Has a Murcielago made anyone want to run out and get a Golf? It's a strange phenomenon that companies keep putting these cars out, but goodness knows I'm not complaining.

        • 5 Years Ago
        Aston Martin actually was slightly in the black at the very end of the Ford ownership however I suspect in large part because of the merchandise licensing and not so much the true automotive piece.

        I was astounded when the initial bids for the company were north of $500M US let alone nearing $1B US at the time. Who in their right mind would ever have purchased a brand - even with a lovely line-up of cars and solid quality - for that much money? There is a finite number of people who can buy a $150k+ sportscar. And even the high margin revenue from tee-shirts with the AM logo and the like dries up after awhile.

        Not to mention for the massive investment to buy the brand you have only about a 5-year lifespan on the basic tooling before you have to plow tens if not hundreds of millions more into revamping the lineup.

        The simple days of the 1980s with Ford buying all of Aston Martin for under $40M US and churning out the same old V8 Vantage and Volante with the same old bodystyling for another decade are long gone. These owners even if the go-go days of this decade continued would've had financial issues with the nose bleed inducing purchase price.

        In the words of Thomas Crown (1968) "You over paid".
        • 5 Years Ago
        I think Aston has almost always lost money. I assume it is still in buisiness because they make beautiful cars and there is some prestige associated with owning them.
        From a purely business perspective it should be euthanized.
      • 5 Years Ago
      At the right price, a perfect fit for BMW.

      They have one iconic British brand and this would slot in nicely
      betwen BMW (the brand) and RR.
        • 5 Years Ago
        are you high?
        • 5 Years Ago
        2 iconic British brands, you mean- what about MINI?
      • 5 Years Ago
      I hope so. Im not a big Aston Fan but that one-77 is just awesome.
      • 5 Years Ago
      LOL. FORD should buy it back $0.30 on the dinar (that's $.10 on the dollar but you get the idea!).
      Reminds me of when the Japanese bought Pebble Beach and the Japanese economy imploded.
      • 5 Years Ago
      "defaulted on a $100m Islamic bond in April."

      I wouldn't want to be staring down the barrel of their collection agency!
        • 5 Years Ago
        Somehow I have a feeling an Islamic Bond is one of those things you might want to pay back. lol
      • 5 Years Ago
      I wonder what an Islamic bond is...
        • 5 Years Ago
        Technically a follower of Islam may not charge interest on money loaned. An Islamic bond is basically a no-interest loan from one islamofascist to another.
        This is probably a Sukuk.
      • 5 Years Ago
      Mercedes Benz tie-in perhaps?
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