Aston Martin close to £1 billion in debt

British sports car maker Aston Martin is approaching £1 billion in net debt, according to an earnings report published earlier this week.

Between January and March this year the company posted a net loss of £47.7 million, with net debt eclisping £956.8 million – up from £722.9 million this time last year.

Net debt refers to the debt that would remain if all cash and assets were used to pay off what a company owes, meaning Aston Martin would come up £1 billion short if its obligations were due tomorrow.

Financial struggles have plagued Aston Martin for some time.

According to the Reuters news agency, Aston Martin has reported an operating loss for all but two years since 2010.

The company’s stock price has fallen from 10,914.98 points to 902.60 on the GBX stock exchange since its initial public offering in 2018 – a staggering collapse of more than 90 per cent.

Its market valuation has fallen from £4.33 billion to £1.08 billion, indicating Aston Martin could conceivably be carrying a net debt greater than its entire worth in the not-too-distant future.

The news came as CEO Tobias Moers announced his departure earlier this week, reportedly due to a feud with controversial executive chairman and investor Lawrence Stroll over the brand's allegiance with Mercedes-AMG.

Significant money was spent on engine development and a unique vehicle platform under former CEO Andy Palmer, however sales have since fallen below expectations.

The Aston Martin DBX SUV (shown above) has likely underperformed in its role as a company cash-cow, with the Wales factory reportedly operating at 60 per cent capacity.

While Aston Martin has previously said the manufacturing facility can build 5000 SUVs each year, in 2021 approximately 3000 were reported as sold worldwide.

Meanwhile, the Valkyrie hypercar has faced numerous delays due to technical challenges.

Drive understands customer deliveries are yet to be finalised.

At the flagship vehicle's public debut at the Goodwood Festival of Speed in 2021, mechanical faults caused two seperate breakdowns during the prestigious hill climb.

The Aston Martin Valhalla supercar was almost entirely redesigned last year, and a complex and expensive hybrid V6 powertrain developed in-house was ditched in favour of a 4.0-litre V8 from Mercedes-AMG.

Aston Martin pays an estimated £24 million annual licence fee to the Stroll-owned 'Works' Formula One team, though poor results have led some to question its return on investment.

However, shareholders don’t believe the situation is irredeemable just yet – following yesterday's announcements stocks ticked upwards slightly, on hopes new CEO Amedeo Felisa can turn the company around.

Aston Martin is one of many iconic British car brands to go through phases of spectacular financial failure, having declared bankruptcy seven times since its founding 109 years ago: in 1924, 1925, 1932, 1947, 1974, 1981 and 2007.

Earlier this year Drive reported the company is preparing to launch an all-new electric car in 2025, potentially underpinned by the Mercedes-EQ platform.

However, it's unclear how the recent departure of purported Mercedes-ally Tobias Moers – and rumoured plans to partner with ex-Ferrari talent in Italy – may have impacted those plans.