Aston Martin Lagonda is in deep trouble as per a report by BusinessF1 that claims that the company has suffered losses worth $147,500,000 in the quarter from January to March. Therefore, according to the F1 magazine, Lawrence Stroll has accepted that he won’t be able to do much in this situation apart from handing the company over to Geely.
Geely, a Chinese car company, first made headlines back in May when they bought shares of Aston Martin Lagonda from Lawrence Stroll for around $145,000,000. As per BusinessF1, Stroll will slowly hand over the rest of the company to Geely over the next two years and gradually leave the British company.
In doing so, Stroll and the Yew Tree Consortium that backed him will bag about $800 million. This would mean that the Yew Tree consortium would just about break even, and won’t suffer any major losses.
Aston Martin’s financial figures left Lawrence Stroll in shock
Lawrence Stroll reportedly set his plans into motion when he came to know about the cash flow of the company for the January-March quarter in 2023. The company had lost about $2.5 million per day during that time period, taking the net debt of the company up to $1.206 billion.
The company received an injection of funds worth $800 million in 2022 from the Saudi Public Investment Fund and other shareholders. This means that Aston Martin Lagonda had used up $674 million in just one year.
To add to this, Stroll also realized that the reason for losses skyrocketing in those 13 weeks was that the last quarter of 2022 had been filled up with artificial sales. This means that sales that were due for January 2023, were shown to be completed in December 2022 to show a profit. However, this led to the numbers worsening in January.
This was quite problematic for Stroll. Ironically, the Canadian billionaire had criticized former owner Andy Palmer for doing the exact same thing in 2019.
Honda Racing Team on the grid from 2025?
The exit of Lawrence Stroll from Aston Martin Lagonda might lead to problems for the Aston Martin F1 team. Even though they are two separate entities, both of them have common shareholders right now and are headed by Stroll.
The current setup between the entities is that Aston Martin Lagonda pays $30 million to ensure the naming rights for the Aston Martin F1 team. The F1 team has also recently announced that it will tie up with Honda from 2025 and the Japanese company will provide them with power units.
On the other hand, Aston Martin Lagonda shares a very good relationship with Mercedes. If and when Geely takes over the brand, they would want to save that relationship. This might mean that they will stop the $30 million payment to the Aston Martin Racing team, leaving just the Honda name behind.
