Just last week we told you that two buyers were vying for a share in Aston Martin, up for grabs from current owner Investment Dar. That’s where the good news ends and the bad news starts; Investment Dar was hoping to get $800 million for its 64-percent stake in the company, but the bids received from Investindustrial and Mahindra & Mahindra were significantly below this amount.
Now comes word from Bloomberg (via Motor Authority) that Moody’s Investors Service has placed Aston Martin on downgrade watch, signaling a possible credit downgrade from the automaker’s already-shaky B3 rating. Moody’s cites Aston Martin’s negative cash flow in the third quarter and total cash dropping below $40 million as the primary reasons for the downgrade watch.
A credit rating of B3 already signals a “high credit risk,” so downgrading the company further certainly won’t help it attract new investors. Nonetheless, Aston Martin is in dialogue to offer new shares to investors to raise additional capital required for growth.
Longer term, the big question is whether or not Aston Martin can survive on its current product mix of high-end luxury sports cars. Without a full-line offering to lower fuel economy numbers to acceptable levels in both the U.S. and Europe, Aston Martin’s credit rating may be only a temporary concern.
Kurt Ernst has been passionate about automobiles and driving nearly his entire life. His early years were shaped working in the family service station, though his real passion was auto racing. After graduating from the University of Colorado, Kurt spent a year club racing with the Sports Car Club of America, before focusing on a business career in marketing and project management. Later, his passion for writing and the automotive hobby found him freelancing for a variety of automotive news sites, including Automotive Addicts and Motor Authority, where his work was syndicated and appeared in several national publications. Recognized as an expert in the automotive field, Kurt joined Hemmings Motor News as an Associate Editor in 2013, and in the years since has progressed to Editor, Hemmings Daily; Managing Editor for Hemmings Motor News, Hemmings Classic Car, Hemmings Muscle Machines, and the Hemmings Daily; and now, Managing Editor, Hemmings Auctions. Kurt was instrumental in organizing the Hemmings Motor News Concours d’Elegance from 2013-2019, and has served as a judge at this event and The Vintage Racing Stable Concours d’Elegance. A Skip Barber Racing School graduate and prolific writer, Ernst is also skilled in copyediting, project management, brand development, and public relations.
