Lawrence Stroll, a Canadian billionaire who is an owner of Formula One team Racing Point, is planning for a bid for a major stake in Aston Martin, Autocar magazine reported, sending the luxury sports automaker’s battered shares a boost of 17% on Thursday.
Aston Martin has observed its shares decline since its flotation in October 2018 as sales have not met the expectations.
Stroll is heading up a consortium looking to grab a “major shareholding” in the British company.
Stroll is the father of Formula One driver Lance Stroll
It has been also reported that Racing Point could be rebranded as Aston Martin if Stroll succeeded in grabbing a controlling stake.
Aston Martin refused to comment and Racing Point said Stroll was not available for comment.
The automaker’s shares boosted almost 17% at 5.88 pounds ($7.74), valuing the business at about 1.3 billion pounds ($1.7 billion), but still much below their initial public offering (IPO) price of 19 pounds.
As the auto industry consolidates through deals such as the Peugeot-Fiat merger, Aston has stated it does not need to belong to a bigger automotive group, highlighting to the success of stand-alone competitor Ferrari.
But the sale of a stake could help increase the company’s prospects as it looks forward to improve the performance, which pushed it to a 92.3 million pound ($118.4 million) loss in the first nine months of 2019.
In August, Strategic European Investment Group, acquired another 3% stake in the company after already owning 31% of Aston Martin.
A month later, Aston Martin raised $150 million in debt at 12% interest, increasing its borrowing costs, to bolster its balance sheet for the release of its DBX sports utility vehicle in 2020, with the option for another $100 million.
The company’s hopes rest on nearly doubling sales with its first SUV, which goes into production in 2020, particularly by attracting more female customers to the brand.