Aston Martin bailed out by Canadian F1 billionaire

Aston Martin has been rescued from collapse by a £500 million (US$656 million) bailout led by a Formula 1 billionaire.

The ailing carmaker said in a statement Friday that Canadian Lawrence Stroll, who is part owner of the Racing Point Formula 1 team, is leading a group that will pay £182 million ($239 million) for 16.7% of the company.

Aston Martin will raise an additional £318 million ($417 million) through the issue of new shares.

Stroll will become executive chairman of the company, which has battled weak demand for some of its models, a global auto slowdown and uncertainty over Brexit following an IPO in 2018.

Shares in the carmaker, the favorite ride of fictional British secret service agent James Bond, jumped as much as 30% in London on Friday.

The 106-year old company unnerved investors earlier this month by warning that its profit for 2019 is expected to fall by nearly half from a year earlier despite healthy orders for its first ever SUV, the DBX.

"The difficult trading performance in 2019 resulted in severe pressure on liquidity which has left the company with no alternative but to seek substantial additional equity financing," Penny Hughes, who will step down as Aston Martin chairperson, said in a statement.

"Without this the balance sheet is not robust enough to support the operations of the group," Hughes said.

As part of the deal, the Racing Point team will be renamed Aston Martin F1 starting with the 2021 season, the company said. For 2020, the company will continue to sponsor the rival Red Bull team.

— Charles Riley contributed reporting.