British carmaker Aston Martin preparing for October IPO worth $6.7 billion

According to Aston’s Martin’s CEO, Andy Palmer, investor interest in the IPO is high. The IPO will mark the 1st time a British carmaker has tapped the primary market in decades.

On Thursday, British luxury carmaker Aston Martin stated, it aims to have a valuation of at least $6.7 billion for upcoming IPO. It is also preparing for any eventuality over Brexit.

Last month, Aston Martin disclosed it was pursuing a stock market flotation, marking the first time a British carmaker tapping the public for funding in decades.

Aston Martin is set to publish a prospectus later today and hopes to announce its final pricing on or around October 3. It also stated, it aims to list its shares on the London Stock Exchange on or around October 8.

The timing of its IPO comes at a time when British carmakers have warned of the impact any customs checks will have to its costs. A hard Brexit will slow down its production and significantly add to its cost.

According to Andy Palmer, Aston Martin’s CEO, the carmaker has boosted its stock of engines and other components in case unfettered access to the European Union is cancelled after March 2019.

“We’re up to five days of engine stock for example and we’ve got a very large warehouse in Wellesbourne (in central England) where we have at least five days of car stock,” said Palmer. “If there are tariffs … for every car we lose because of a 10 percent tariff into Europe, we presumably pick up from Ferrari and Lamborghini in the other direction because obviously their cars become more expensive in the UK”.

Brussels and London hope to conclude Brexit negotiations, said to be the most complicated negotiations since the second world war, by the end of this year. Carmakers including Jaguar Land Rover (JLR), and BMW are worried that if British Prime Minister Theresa May’s government fails to clinch passporting rights, it could significantly add to production costs and snarl-ups at motorways.

Ralf Speth, the CEO of Britain’s biggest carmaker Jaguar Land Rover told last week that the wrong Brexit deal could cost tens of thousands of car jobs and risk production at the firm.

Regarding its IPO, Aston is targeting a price range of 17.50 pounds to 22.50 pounds per share and aims to have a market capitalization between 4.02 and 5.07 billion pounds.

Ever since Palmer held the reins at the company in 2014, the carmaker has undergone a turnaround: i has boosted volumes and has expanded into new segments. Aston Martin is scheduled to open a new factory in 2019.

According to Palmer, investor interest in its IPO has been “unprecedented” and he expects the carmaker to make significantly more growth in the years to come.

“The tendency of the investors are ‘long only’ type investors, people that understand that this is a growth story” said Palmer when asked who he would be meeting. “The aeroplane is half way down the runway but there’s still half the runway to go.”


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