Aston Martin Lagonda Glo... Share Discussion Threads

[swiss tony] 10/8/2022 19:49

It's not even close to being enough.
The CFO has stated at the analyst Q&A last week, that half the funds raised will pay off the debt, which will save them in the region of £30m per year.
Debt repayments right now are £290m per year, so after this raise they will be £260m.

Stroll's target of 10,000 cars, 2bn turnover and 500m EBITDA is for 2024/25.
500m minus 260m interest, minus 300m D&A equals.....
£60m loss, but with another 2 years of eye-watering debt repayments.

So why should shareholders get diluted again to the tune of 50%, and almost certainly diluted again before 2024, just to hit targets of a £60m loss?
Stroll is using shareholders as free finance for his son's F1 career, he has very little cash invested himself in AML.

[alwaysvalue] 10/8/2022 19:14

I've tried and failed to understand the balance sheet and actually get a good feeling for what's happening which is all I need to know to stay out. Anyone want to take a punt at what free cash flow ought to be if there was no debt, no suppliers owed money, all deposits paid off, legal cases settled, no F1 payments and spurious specials shut down and loses taken. What would the core business generate? Without some fundamental change of direction I don't see how the equity raise will be enough.

[blackhorse23] 07/8/2022 19:36

Aston in red every year .. investors loosing every month ... glad I have moved to MCB (LSE) few months ago & which looks very potential , high growth stocks ... upside signals now 200 percentage

[porsche1945] 02/8/2022 17:31

Bet you poor sods invested in this terminal dogshxt wish you had heeded my advice when this was floated, I said its a screaming short ( bankrupt 7 times in its history and all ICE cars are fxcked ) and to buy tesla, I shorted this with three different brokers from 17.60 to .64p and tesla went parabolic…..best trades of my life and as I’m offshore based so zero capital gains on the trades. Love it. Aston M will be taken out by its bondholders, its always been a shxt company with shxt cars. BUY TESLA FFS, will be 1400 by xmas and 16.80/17.40 by next spring. Assuming i will be called anti British by a load of self harming brexit deadbeats on here again, well I’m laughing all the way to the bank axxholes.

[swiss tony] 01/8/2022 16:09

Surely a 41 year old F1 driver is the equivalent of a 76 year old (puppet) CEO?

[swiss tony] 31/7/2022 14:21

I can;t short it ether (IG too), but it doesn't stop everyone accusing me of being a shorter, it's hilarious!

[arai] 31/7/2022 12:54

ST, I am aggrieved as I can't short it via my IG account ;o)

[swiss tony] 31/7/2022 11:31

I would say you are mostly correct, Wilm.

But the first raise at £3.35 is just for PIF to gain a portion of AML, in order to take up the second rights issue, so 'technically' they are seperate entities.
There is no way the second rights issue will be higher than £3.35, unless the share price rises massively in the next few weeks before the announcement is made.
ie if the share price hit £8, the RI price would be c.£4 and TERP would be somewhere in between, c £5.80.

My intuition tells me the same as you, the average share price over the last month (before the RI price is officially calculated) is the key.

One thing is for sure, you can't raise more than your market cap with a dilution of less than 23%.
Double the shares means 50% discount, more or less.
You mess up the balance sheet, you pay hard in a fund raise. The market should not celebrate or reward bad business decisions.

I bet 10% of this raised money is going to the banks in fees alone.
Stroll mismanaged again, shareholders are paying a fortune for his mishandling of the situation.

The FT comments on recent stories are bang on again, the last one I read was blatant: Stroll is asset stripping the company, using the name to raise hundreds of millions for his private F1 team and loading AML.L up with unsustainable debt, while drowning shareholders with constant dilution.
Shareholders should be aggrieved.

[wilmdav] 30/7/2022 21:55

According to Investopedia, Theoretical Ex-Right Price (TERP) = (market cap at closing price of last day of rights offering + amount raised) divided by total number of shares after RI is complete.

I've been amusing myself by trying to calculate the TERP for various RI discounts, on the assumption that the pre-RI market value is £558m (475p), which is a rough average of where it has been over the last two trading days.

Amount raised is £653m, including £78m from placing. So numerator is 558 + 653

and TERP = 1,211 / Ts where Ts is the total number of shares post-RI

Ts = pre-announcement shares + placing shares + RI shares
Ts = 116.5m + 23.3m + Rs

Rs = amount raised in RI (£575m) divided by RI price

Plug in a figure for the RI price, say £2.50

Rs = 575 / 2.5 = 230 shares

So Ts = 116.5 + 23.3 + 230 = 369.8m shares

TERP = 1211 / 369.8 = £3.27

and RI discount to TERP = 23.5%

Plug in £2.25 as the RI price and TERP comes out at £3.07 at a discount of 26.6%

Plug in £1.00 as RI price and TERP comes out at £1.68 and discount at 40.5%, which is within jonnywalker's suggestion of an appropriate range for a high risk RI.

On this basis TERP will only reach or exceed the placing price of £3.35 if the share price rises significantly before the RI completes or if the discount is less than 23%.

Others might be inclined to deal with the placing differently in the calculations but the above seems to suggest that TERP is likely to be significantly lower than the placing price.

PS. I will be off line all day tomorrow but back on Monday.

[swiss tony] 30/7/2022 13:57

So basically, this huge cash raise and dilution doesn't even put AML back to where they were 8 months ago......

Current net debt: £1.27 billion
Current cash: £156m

Rights issue, raising £653m, half (£326m) to pay off debt, and half (£326m) to cash.

Debt reduces from £1.27bn to £994m
Cash raises from £156m to £482m.

Results on 4th November 2021 stated Net debt at £808m & cash at £575m.


(Debt interest will be reduced from £295m per year to £265m per year, as confirmed by the CFO yesterday.)

[deanmatlazin] 29/7/2022 10:03

My eyes water look at the account. Cant't even breathe looking at the debt! Bloody ell

[swiss tony] 29/7/2022 09:37

Burned through £263m of cash in 6 months and only got £150m left in the bank.
At current cash burn rate, £150m doesn't even last 3 months.

SUV sales DOWN 32%. 1,083 from 1,595.

APAC UP 5 %. 854 up from 811.

Americas DOWN 32%. 720 down from 1,056

Net debt rises from 791m to 1.27 BILLION.

CASH BALANCE of £156m (December 2021: £419m)

Debt interest @ c.£290m (P&L), £95m higher than previous guidance of c.£195m largely driven by non-cash FX revaluation of dollar-denominated debt in H1
Analyst call, CFO states cash raise will save them £30m per year.
£290m minus £30 means debt still costs £260m per annum.
More if interest rates keep rising.

Pre-tax loss of 285.4 million pounds ($347.99 million) for the six months ended June 30, compared with a loss of 90.7 million pounds a year earlier

[loglorry1] 29/7/2022 08:48

The results are just steeped in adjustments. I have no faith in these approaching positive free cash flow and adjusted EBITDA numbers. Even the P&L has to be adjusted for FX movements to avoid a near half billion loss.

I have some sympathy for the non-cash FX adjustment but I suspect a lot of their costs (including the huge interest costs) are in $ terms so it's not nearly as clear as they point out.

Futhremore, they say guidance was missed!

[swiss tony] 29/7/2022 08:25

I would be raising the debt in $US terms now!

[loglorry1] 29/7/2022 08:22

Results pretty terrible but a lot of movement in debt was down to non-cash FX movement. It's still debt in £ that needs to be repaid. Maybe it looks the cars look a bit cheaper in $ terms to foreign buyers but that debt is still real (unless FX moves back). The problem is that for the £ to get stronger against the $ will require sterling interest rate rises which will be very bad for consumer spending and thus car sales.

Perhaps more importantly the money they are currently raising to pay down debt is in sterling terms so that FX movement is to a large extent realised.

[wilmdav] 29/7/2022 08:10

Cash balance £156m (Dec 21: £404m)
Net debt £1,266m (Dec 21: £892m)

[swiss tony] 28/7/2022 14:22

Thanks Johnny.
H1 results tomorrow folks....
See y'all bright and early ;)

[jonnywalker77] 26/7/2022 20:20

The RI price is calculated to give a certain discount to the TERP (which is itself a function of the RI price, as well as market cap, money raised and original share count). That discount (usually 30-35%) is designed to make sure that the underwriters don’t take a bath on any unsubscribed rights (although sometimes they get it wrong - e.g. Kier a few years back where the shares traded below TERP). The point is the riskier the RI, the bigger that discount will be (and thus lower the RI price).

You can actually work out the RI price for a given discount to TERP algebraically, although in practice city boys (who struggle with any maths beyond addition or subtraction) work out the RI price by trial and error (i.e. keep iterating it until you get to the right discount to TERP).

[swiss tony] 26/7/2022 19:26

Johnny, surely the RI price gets worked out first, the the TERP is calculated after?
You seem to be proffering it's the other way round. Can you explain please? Cheers.