Geely’s Chinese billionaire eyes bigger stake in Aston Martin

CHINESE billionaire Li Shufu is considering boosting his stake in Aston Martin Lagonda Global Holdings over time to foster collaboration with the struggling luxury car maker, according to people familiar with the matter. Li, whose Zhejiang Geely Holding Group acquired a 7.6 per cent stake in the quintessentially British brand last month, is interested in raising that shareholding close to 10 per cent in the future, the people said, asking not to be identified as discussions are private. Such a move could pave the way for more sharing of technology and electrification know-how.  Geely’s considerations are early stage and it could opt to stay at the current shareholding level, the people said. Any attempt to gain too much control could run into opposition from existing shareholders including Saudi Arabia’s Public Investment Fund and Canadian billionaire Lawrence Stroll. Geely Holding currently has no plans to raise its stake in Aston Martin, the company said in a statement. A representative for Aston Martin declined to comment. Once touted as a peer to Ferrari, Aston Martin has suffered a number of setbacks since its initial public offering in 2018. With dwindling cash and rising debt, the manufacturer sought a rescue in 2020 from Stroll, who injected cash and forged closer ties with Mercedes-Benz Group. At the time of the investment on Sep 30, Geely said it saw potential opportunities to collaborate with Aston Martin. A move on the manufacturer synonymous with James Bond films may precipitate Geely seeking to tap into the carmaker’s brand appeal and expand into new markets. Geely, which owns Volvo Car and a plethora of shareholdings in major automotive companies including Mercedes, also took control of British roadster maker Lotus in 2017. Earlier this year, Lotus unveiled an electric SUV that will be built in China and spearhead a broader model lineup with a plan to boost production to 150,000 cars, up from fewer than 2,000. 

Rejected proposal

In July, Aston Martin said it had rejected a proposal by Geely and Investindustrial for an equity investment of as much as £1.3 billion (S$2.1 billion). Since then, its shares have slumped almost 40 per cent. While working on its turnaround, Aston Martin has seen key models delayed, leading to further measures to prop up the company. This included a £654 million capital raise to improve its balance sheet, bringing in Saudi Arabia’s Public Investment Fund. BLOOMBERG