Summary
A group of creditors owed a total of £1.3 billion told Aston Martin's board in a "letter before action" that they could seek to unwind a newly agreed debt package and block the disposal of intellectual property assets, after learning that a component of the deal depends on selling a controlling stake in non-automotive branding rights to Authentic Brands, the Financial Times reported.
Key points
- The carmaker secured £550 million in debt financing in July, led by funds managed by HPS Investment Partners.
- The financing includes a £450 million secured term loan, a £100 million delayed-draw term loan, and a separate £100 million permitted debt incurrence capacity.
- Part of the HPS package appears conditional on transferring a 50.1% stake of Aston Martin's non-automotive intellectual property to Authentic Brands; HPS is reported to have an investment in Authentic Brands.
Background and creditor action
The creditors, described as some of Aston Martin's existing lenders and collectively owed about £1.3 billion, delivered the letter on Sunday, warning the company that they could attempt to unwind the transaction with HPS and block the proposed disposal of certain intellectual property assets. The creditors were not identified in the report cited.
According to the report, details of the HPS transaction have not been fully disclosed to all existing creditors. Aston Martin has not shared the terms of its agreement with HPS, leaving creditors concerned about aspects of the financing that hinge on the branding-rights transfer.
Structure of the financing
The financing package obtained in July totals £550 million and is led by funds managed by HPS Investment Partners. It is composed of a £450 million secured term loan and a £100 million delayed-draw term loan. Separately, the arrangement provides a £100 million permitted debt incurrence capacity.
The report states that an additional £100 million available under the HPS package is conditional on the branding-rights transaction completing. The report also cites sources who said that the deal contemplates transferring a 50.1% stake in Aston Martin's non-automotive intellectual property to Authentic Brands.
Responses and verification
Aston Martin and HPS were not reached for comment outside regular business hours. The report noted that Reuters could not independently verify the details.
Financial pressures facing Aston Martin
The company has been managing cash pressures linked to weaker sales, U.S. tariffs and soft demand in China, which have prompted the 113-year-old automaker to pursue cost reductions and seek new sources of funding.
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