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Aston Martin Complete Turnaround Circle By Planning An IPO

Aston Martin Complete Turnaround Circle By Planning An IPO
Luxury carmaker Aston Martin apparently completes a circle of turnaround as it now plans to go public at the London Stock Exchange. The company which once was distinguished as a loss-making car maker is not valued at up to 5 billion pounds ($6.4 billion).
The company which is 105 years old and known for manufacturing a sports car that once was driven by the fictional secret agent James Bond will be the fist auto maker to get listed in London in many years. The company has gained strength after selling off its brands like Jaguar and Bentley to foreign owners.
According to analysts the company could be value at up to 5 billion pounds following the expansion of its model line-up and production. The Italian rival of the company – Ferrari, went public in 2015 in New York.
There have been several occasions during its long history that the car maker had gone bankrupt and managed to return to profits last year after a gap of nearly 7 years. The company said that the IPO would include sale of shares by its main owners, Kuwaiti and Italian private equity groups, and at least 25 per cent of its total stocks would be floated for the public.
Companies wanting to float itself in London has to first file a registration document with Britain’s Financial Conduct Authority and the car maker has already done that.
It is expected that the LSE would publish a prospectus around September 20 after a final decision is taken as the car maker sets a strategy of tapping into the rising global demand among wealthy customers to own high end vehicles.
Sources have said that the firm desires to issue the IPO by the end of the current year. 
EU accounts for about a quarter of the total annual sale of the car maker and the company has only one factory situated at Gaydon, central England. A second manufacturing units of the company is slated to start production from 2019 and is located in Wales.
“We can demonstrate that Brexit is not a major effect for us,” Chief Executive Andy Palmer told news agency Reuters. “If there is a tariff into Europe, it’s countered by a tariff into the UK for our competitors so you might lose a little bit of market share in the EU but you pick it up in the UK,” he said.
Luxury car makers such as Aston and McLaren, whose target customer base are the rich and the wealthy, are less concerned about tariffs but more concerned about lengthy customs checks as they believe that the additional costs because of tariffs can be absorbed by their customer base.
Just like a number of other British car makers, a number of car parts are imported into the UK from parts of Europe by Aston such as car engines from Germany and therefore it could face delays in delivery at ports in case the UK does not manage to get a favorable Brexit deal. The company is increasing its stocks in anticipation of such an emergency, Palmer said.

Christopher J. Mitchell

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