printmgr file

ELECTRONIC TRANSMISSION DISCLAIMER

STRICTLY NOT TO BE FORWARDED TO ANY OTHER PERSONS

IMPORTANT: You must read the following disclaimer before continuing. This electronic transmission applies to the

attached document and you are therefore advised to read this disclaimer carefully before reading, accessing or

making any other use of the attached combined prospectus and circular (the “Prospectus”) relating to Aston Martin

Lagonda Global Holdings plc (the “Company”) dated 27 February 2020 received by means of electronic

communication. In accessing or making any other use of the attached document, you agree to be bound by the

following terms and conditions, including any modifications to them from time to time, each time you receive any

information from us as a result of such access.

You acknowledge that this electronic transmission and the delivery of the attached document is confidential and intended

for you only and you agree you will not forward, reproduce, copy, download or publish this electronic transmission or the

attached document to any other person. The Prospectus has been prepared solely in connection with the proposed placing

of ordinary shares (the “Placing Shares”) in the Company to the Yew Tree Consortium (the “Placing”) and the rights issue

(the “Rights Issue” which taken together with the Placing shall comprise the “Capital Raise”) of ordinary shares (the “New

Shares”) of the Company and the proposed admission of the Placing Shares and the New Shares (nil paid and fully paid) to

the premium listing segment of the Official List of the UK Financial Conduct Authority (the “FCA”) and to trading on the

London Stock Exchange plc’s main market for listed securities (“Admission”).

This Prospectus comprises (i) a circular prepared in accordance with the Listing Rules of the FCA made under section 73A of

the Financial Services and Markets Act 2000 (“FSMA”) and (ii) a prospectus relating to the Company prepared in

accordance with the Prospectus Regulation Rules of the FCA made under section 73A of the FSMA. This Prospectus has

been approved by the FCA (as competent authority under Regulation (EU) 2017/1129) (the “Prospectus Regulation”) in

accordance with section 85 of the FSMA. The FCA only approves this document as meeting the standards of completeness,

comprehensibility and consistency imposed by the Prospectus Regulation, and such approval should not be considered as

an endorsement of the issuer that is, or the quality of the securities that are, the subject of this document. Investors should

make their own assessment as to the suitability of investing in the New Shares.

This Prospectus has been filed with the FCA in accordance with the Prospectus Regulation Rules and will be made

available to the public in accordance with Prospectus Regulation Rule 3.2 by the same being made available, free of

charge, at www.astonmartinlagonda.com/investors and at the Company’s registered office at Banbury Road, Gaydon,

Warwick CV35 0DB, United Kingdom.

THIS ELECTRONIC TRANSMISSION AND THE ATTACHED DOCUMENT MAY ONLY BE DISTRIBUTED, OUTSIDE THE UNITED

STATES, IN “OFFSHORE TRANSACTIONS” IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES

ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR, WITHIN THE UNITED STATES, TO CERTAIN PERSONS

REASONABLY BELIEVED TO BE QUALIFIED INSTITUTIONAL BUYERS (“QIBs”) AS DEFINED IN RULE 144A UNDER THE

SECURITIES ACT (“RULE 144A”) OR TO OTHER PERSONS, IN OFFERINGS EXEMPT FROM OR IN A TRANSACTION NOT

SUBJECT TO THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, AND, IN EACH CASE, IN COMPLIANCE WITH

ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. ANY FORWARDING,

DISTRIBUTION OR REPRODUCTION OF THE ATTACHED DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO

COMPLY WITH THIS NOTICE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER

JURISDICTIONS. NOTHING IN THIS ELECTRONIC TRANSMISSION AND THE ATTACHED DOCUMENT CONSTITUTES AN OFFER

OF SECURITIES FOR SALE IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO.

THE NIL PAID RIGHTS, THE FULLY PAID RIGHTS, THE NEW SHARES, THE PROVISIONAL ALLOTMENT LETTERS AND THE

PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OR UNDER ANY

SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,

PLEDGED, TAKEN UP, EXERCISED, RESOLD, RENOUNCED, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, EXCEPT

(1) WITHIN THE UNITED STATES TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY

BELIEVES IS A QIB IN ACCORDANCE WITH RULE 144A, OR TO OTHER PERSONS PURSUANT TO AN APPLICABLE EXEMPTION

FROM OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, OR

(2) OUTSIDE THE UNITED STATES, IN AN OFFSHORE TRANSACTION IN RELIANCE ON REGULATION S UNDER THE SECURITIES

ACT, IN EACH CASE IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF

THE UNITED STATES. THERE WILL BE NO PUBLIC OFFER OF THE NIL PAID RIGHTS, THE FULLY PAID RIGHTS, THE NEW

SHARES OR THE PLACING SHARES IN THE UNITED STATES. SUBJECT TO CERTAIN LIMITED EXCEPTIONS, PROVISIONAL

ALLOTMENT LETTERS HAVE NOT BEEN, AND WILL NOT BE, SENT TO, AND NIL PAID RIGHTS HAVE NOT BEEN AND WILL

NOT BE CREDITED TO THE CREST ACCOUNT OF, ANY QUALIFYING SHAREHOLDER WITH A REGISTERED ADDRESS IN OR

THAT IS LOCATED IN THE UNITED STATES.

The distribution of this document or the provisional allotment letters and the transfer of Nil Paid Rights, Fully Paid Rights,

New Shares or Placing Shares into jurisdictions other than the United Kingdom may be restricted by law and therefore

persons into whose possession this document comes should inform themselves about and observe any such restrictions.

Any failure to comply with any such restrictions may constitute a violation of the securities laws or regulations of such

jurisdictions. In particular, subject to certain exceptions, this document, the enclosures and any other such documents

should not be distributed, forwarded to or transmitted in, and the provisional allotment letters, the Nil Paid Rights, the

Fully Paid Rights, the New Shares and the Placing Shares may not be transferred or sold to, or renounced or delivered in or

into the United States, Australia, Canada, Japan, the People’s Republic of China and the Republic of South Africa or any

other jurisdictions where the extension and availability of the Capital Raise would breach any applicable law. No offer of

New Shares is being made by virtue of this document of the provisional allotment letters into the United States, Australia,

Canada, Japan, the People’s Republic of China and the Republic of South Africa.

This electronic transmission and the attached document and the Capital Raise when made are only addressed to and

directed at persons in member states of the European Economic Area, other than the United Kingdom, who are

“qualified investors” within the meaning of Article 2(e) of the Prospectus Regulation (“Qualified Investors”). This

electronic transmission and the attached document must not be acted on or relied on in any member state of the

European Economic Area other than the United Kingdom, by persons who are not Qualified Investors. Any investment

or investment activity to which this document relates is available only, in any member state of the European Economic

Area other than the United Kingdom, to Qualified Investors, and will be engaged in only with such persons.

The making or acceptance of the proposed offer of Nil Paid Rights, Fully Paid Rights and New Shares to persons who

have registered addresses outside the United Kingdom, or who are resident in, or citizens of, countries other than

the United Kingdom may be affected by the laws of the relevant jurisdiction. Those persons should consult their

professional advisers as to whether they require any governmental or other consents or need to observe any other

formalities to enable them to participate in the Capital Raise.

It is also the responsibility of any person (including, without limitation, custodians, nominees and trustees) outside the

UK wishing to take up rights under or otherwise participate in the Rights Issue to satisfy himself, herself or itself as to

the full observance of the laws of any relevant territory in connection therewith, including the obtaining of any

governmental or other consents which may be required, the compliance with other necessary formalities and the

payment of any issue, transfer or other taxes due in such territories.

Confirmation of Your Representation: This electronic transmission and the attached document is delivered to you on

the basis that you are deemed to have represented to the Company and Morgan Stanley & Co. International plc, J.P.

Morgan Securities plc (which conducts its UK investment banking activities under the marketing name J.P. Morgan

Cazenove) and Deutsche Bank AG, London Branch (together, the “Banks”) that (i) you are (a), if located within the

United States, a QIB, in according with Rule 144A under the Securities Act, acquiring such securities for its own account

or for the account of another QIB, or are a person who the Company has otherwise specifically permitted to access the

attached document or (b), if located outside the United States, acquiring such securities in “offshore transactions”, in

accordance with Rule 904 of Regulation S under the Securities Act; (ii) if you are in the United Kingdom, you are a

relevant person and/or a relevant person who is acting on behalf of relevant persons in the United Kingdom and/or

Qualified Investors to the extent you are acting on behalf of persons or entities in the EEA other than the United

Kingdom; (iii) if you are in any member state of the European Economic Area other than the United Kingdom, you are

a Qualified Investor and/or a Qualified Investor acting on behalf of Qualified Investors to the extent you are acting on

behalf of persons or entities in the EEA other than the United Kingdom; (iv) you are an institutional investor that is

eligible to receive this document and you consent to delivery by electronic transmission and (v) you are not located in

Australia, Canada, Japan, the People’s Republic of China and the Republic of South Africa.

You are reminded that you have received this electronic transmission and the attached document on the basis that you

are a person into whose possession this document may be lawfully delivered in accordance with the laws of the

jurisdiction in which you are located and you may not nor are you authorised to deliver this document, electronically or

otherwise, to any other person. This document has been made available to you in an electronic form. You are reminded

that documents transmitted via this medium may be altered or changed during the process of electronic transmission

and consequently neither the Company, the Banks nor any of their respective affiliates, directors, officers, employees or

agents accepts any liability or responsibility whatsoever in respect of any difference between the document distributed

to you in electronic format and the hard copy version. By accessing the attached document, you consent to receiving it

in electronic form. Apart from the responsibilities and liabilities, if any, which may be imposed on the Banks by the

FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where

exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, none of the Banks,

nor any of their respective affiliates, directors, officers, employees or advisers accepts any responsibility or liability

whatsoever for the contents of the attached document, including its accuracy, completeness or verification and makes

no representation or warranty, express or implied, as to the contents of this document or for any statement made or

purported to be made by it, or on its behalf, in connection with the Company or the Nil Paid Rights, the Fully Paid

Rights, the New Shares or the Placing Shares. The Banks and each of their respective affiliates, each accordingly

disclaims to the fullest extent permitted by law all and any liability whether arising in tort, contract or otherwise which

they might otherwise have in respect of such document or any such statement. No representation or warranty express

or implied, is made by any of the Banks or any of their respective affiliates as to the accuracy, completeness or

sufficiency of the information set out in the attached document.

Restriction: Nothing in this electronic transmission constitutes, and may not be used in connection with, an offer of

securities for sale to persons other than the specified categories of institutional buyers described above and to whom

it is directed and access has been limited so that it shall not constitute a general solicitation. If you have gained access

to this transmission contrary to the foregoing restrictions, you will be unable to purchase any of the securities

described therein.

The Banks are acting exclusively for the Company and are acting for no one else in connection with the Capital Raise.

They will not regard any other person (whether or not a recipient of this document) as their client in relation to the

Capital Raise and will not be responsible to anyone other than the Company for providing the protections afforded to

their respective clients nor for giving advice in relation to the Capital Raise or any transaction or arrangement

referred to in this document.

You are responsible for protecting against viruses and other destructive items. Your receipt of this document via

electronic transmission is at your own risk and it is your responsibility to take precautions to ensure that it is free from

viruses and other items of a destructive nature.

THIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE

ATTENTION. If you are in any doubt as to what action you should take, you are recommended to seek immediately your

own financial advice from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate

independent financial adviser, who is authorised under the Financial Services and Markets Act 2000 if you are resident in

the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

This document comprises (i) a circular prepared in accordance with the Listing Rules of the FCA made under section 73A of

the FSMA and (ii) a prospectus relating to Aston Martin Lagonda Global Holdings plc prepared in accordance with the

Prospectus Regulation Rules of the FCA made under section 73A of the FSMA. This document has been approved by the

FCA (as competent authority under Regulation (EU) 2017/1129) in accordance with section 85 of the FSMA. The FCA only

approves this document as meeting the standards of completeness, comprehensibility and consistency imposed by

Regulation (EU) 2017/1129, and such approval should not be considered as an endorsement of the issuer that is, or the

quality of the securities that are, the subject of this document. Investors should make their own assessment as to the

suitability of investing in the Shares.

This document has been filed with the FCA in accordance with the Prospectus Regulation Rules and will be made available

to the public in accordance with Prospectus Regulation Rule 3.2 by the same being made available, free of charge, at

www.astonmartinlagonda.com/investors and at the Company’s registered office at Banbury Road, Gaydon, Warwick CV35

0DB, United Kingdom.

If you sell or have sold or have otherwise transferred all of your Shares (other than ex-rights) held in certificated form

before 8.00 a.m. (London time) on 18 March 2020 (the Ex-Rights Date) please send this document, together with any

Provisional Allotment Letter, if and when received, at once to the purchaser or transferee or to the bank, stockbroker or

other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee except that such

documents should not be sent to any jurisdiction where to do so might constitute a violation of local securities laws or

regulations, including but not limited to the United States or Australia, Canada, Japan, the People’s Republic of China and

the Republic of South Africa (the Excluded Territories). If you sell or have sold or have otherwise transferred all or some of

your Existing Shares (other than ex-rights) held in uncertificated form before the Ex-Rights Date, a claim transaction will

automatically be generated by Euroclear which, on settlement, will transfer the appropriate number of Nil Paid Rights to

the purchaser or transferee. If you sell or have sold or otherwise transferred only part of your holding of Existing Shares

(other than ex-rights) held in certificated form before the Ex-Rights Date, you should refer to the instruction regarding

split applications in Part III - Terms and Conditions of the Rights Issue of this document and in the Provisional Allotment

Letter.

The directors of the Company (the Directors), whose names appear on page 47 of this document, Lawrence Stroll (the

Proposed Director) and the Company accept responsibility for the information contained in this document. To the best of

the knowledge of the Directors and the Company, the information contained in this document is in accordance with the

facts and this document contains no omission likely to affect its import.

The distribution of this document, the Provisional Allotment Letter and the transfer of Nil Paid Rights, Fully Paid Rights

and New Shares into jurisdictions other than the United Kingdom may be restricted by law and therefore persons into

whose possession this document comes should inform themselves about and observe any such restrictions. Any failure

to comply with any such restrictions may constitute a violation of the securities laws or regulations of such jurisdictions.

In particular, subject to certain exceptions, this document, the enclosures and the Provisional Allotment Letter and any

other such documents should not be distributed, forwarded to or transmitted in or into the United States, any of the

Excluded Territories or any other jurisdictions where the extension and availability of the Rights Issue would breach any

applicable law.

Aston Martin Lagonda Global Holdings plc

(incorporated in England and Wales under the Companies Act 2006 with registered number 11488166)

Proposed Placing of 45,600,577 Placing Shares at

400 pence per Placing Share to the Yew Tree Consortium

Proposed 14 for 25 Rights Issue of 153,217,942 New Shares at

207 pence per New Share

Notice of General Meeting

Sole Financial Adviser, Sponsor, Joint Global Co-ordinator and Joint Bookrunner

Morgan Stanley

Joint Global Co-ordinators and Joint Bookrunners

Deutsche Bank J.P. Morgan Cazenove

A Notice of General Meeting of the Company, to be held at 10.00 a.m. on 16 March 2020 at

Freshfields Bruckhaus Deringer LLP, 65 Fleet Street, London EC4Y 1HT, United Kingdom, is set out

at the end of this document. Whether or not you intend to be present at the General Meeting, if

you hold your shares directly you are asked to complete and return the enclosed Form of Proxy in

accordance with the instructions printed on it as soon as possible and, in any event, so as to be

received by the Registrar, Equiniti Limited (Equiniti) at Corporate Actions, Aspect House, Spencer

Road, Lancing, West Sussex, BN99 6DA, United Kingdom, by not later than 10.00 a.m. on

12 March 2020 (or, in the case of an adjournment, not later than 48 hours before the time fixed

for the holding of the adjourned meeting) and in the case of AML Nominee Service Shareholders

the enclosed Voting Instruction Form so as to be received by the Registrar, Equiniti at Corporate

Actions, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom, by not

later than 10.00 a.m. on 11 March 2020.

As an alternative to completing and returning the printed Form of Proxy, Shareholders can also

submit their proxy electronically by accessing the Registrar’s website at www.sharevote.co.uk. To

be valid, the electronic submission must be registered by not later than 10.00 a.m. on 12 March

2020 (or, in the case of an adjournment, not later than 48 hours before the time fixed for the

holding of the adjourned meeting). CREST members may also choose to utilise the CREST

electronic proxy appointment service in accordance with the procedures set out in the Notice of

General Meeting at the end of this document, as soon as possible and in any event no later than

10.00 a.m. on 12 March 2020 (or, in the case of an adjournment, not later than 48 hours before

the time fixed for the holding of the adjourned meeting).

Completion and return of a Form of Proxy (or the electronic appointment of a proxy) will not

preclude you from attending and voting in person at the General Meeting, should you so wish.

The Shares are listed on the premium listing segment of the Official List maintained by the FCA

and traded on the main market for listed securities of London Stock Exchange plc (the London

Stock Exchange). Application will be made to the FCA and to the London Stock Exchange for the

New Shares and the Placing Shares to be admitted to the premium listing segment of the Official

List of the FCA and to trading on the main market for listed securities of the London Stock

Exchange. It is expected that Admission of the New Shares (nil paid) will become effective and

that dealings on the London Stock Exchange in the New Shares (nil paid) will commence at 8.00

a.m. on 18 March 2020 and that Admission of the Placing Shares will become effective and that

dealings on the London Stock Exchange in the Placing Shares will commence at 8.00 a.m. on

17 March 2020.

Your attention is drawn to the letter of recommendation from the Chair which is set out in Part

I - Letter from the Chair of Aston Martin Lagonda Global Holdings plc. Your attention is also

drawn to the section headed “Risk Factors” at the beginning of this document which sets out

certain risks and other factors that should be considered by Shareholders when deciding on

what action to take in relation to the Rights Issue and the Placing (together, the Capital Raise),

and by others when deciding whether or not to purchase Nil Paid Rights, Fully Paid Rights or

New Shares.

Each of Morgan Stanley & Co. International plc (Morgan Stanley) and J.P. Morgan Securities plc

(which conducts its UK investment banking activities under the marketing name J.P. Morgan

Cazenove) (J.P. Morgan Cazenove) is authorised in the United Kingdom by the Prudential

Regulation Authority (PRA) and regulated in the United Kingdom by the FCA and the PRA.

Deutsche Bank AG, London Branch (Deutsche Bank, together with Morgan Stanley and J.P.

Morgan Cazenove, the Underwriters), which is authorised under German Banking Law

(competent authority: European Central Bank) and, in the United Kingdom, by the PRA, is subject

to supervision by the European Central Bank and by BaFin, Germany’s Federal Financial

Supervisory Authority, and is subject to limited regulation in the United Kingdom by the PRA and

the FCA. The Underwriters are acting exclusively for the Company and are acting for no one else

in connection with the Capital Raise and will not regard any other person as a client in relation

to the Capital Raise and will not be responsible to anyone other than the Company for providing

the protections afforded to their respective clients, nor for providing advice in connection with

the Capital Raise or any other matter, transaction or arrangement referred to in this document.

The Underwriters have given and not withdrawn their consent to the issue of this document with

the inclusion of the references to their respective names in the form and context in which they

are included.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Underwriters

by the FSMA or the regulatory regime established thereunder, or under the regulatory regime of

any jurisdiction where exclusion of liability under the relevant regulatory regime would be

illegal, void or unenforceable, none of the Underwriters, nor any of their respective affiliates,

directors, officers, employees or advisers, accepts any responsibility whatsoever for, or makes any

representation or warranty, express or implied, as to the contents of this document, including its

accuracy, completeness or verification, or for any other statement made or purported to be made

by it, or on its behalf, in connection with the Company, the Nil Paid Rights, the Fully Paid Rights,

the New Shares, the Placing Shares, the Rights Issue or the Placing. The Underwriters and their

respective affiliates, directors, officers, employees and advisers accordingly disclaim to the fullest

extent permitted by law any and all liability whatsoever, whether arising in tort, contract or

otherwise, which they might otherwise have in respect of this document or any such statement.

The contents of this Prospectus are not to be construed as legal, business or tax advice. Each

prospective investor should consult their own legal, financial or tax adviser in connection with

the purchase of the New Shares. In making an investment decision, each investor must rely on

their own examination, analysis and enquiry of the Company and the terms of the Capital Raise,

including the merits and risks involved.

The investors also acknowledge that: (i) they have not relied on the Underwriters or any person

affiliated with the Underwriters in connection with any investigation of the accuracy of any

information contained in this document or their investment decision; and (ii) they have relied

only on the information contained in this document and that no person has been authorised to

give any information or to make any representation concerning the Company or its subsidiaries

or the Nil Paid Rights, the Fully Paid Rights, the New Shares or the Placing Shares (other than as

contained in this document) and, if given or made, any such other information or representation

should not be relied upon as having been authorised by the Company or the Underwriters.

Subject to, among other things, the passing of the Resolutions, it is expected that Provisional

Allotment Letters will be dispatched to Qualifying Non-CREST Shareholders and Forms of

Instruction will be dispatched to AML Nominee Service Shareholders (other than, subject to

certain exceptions, those with registered addresses in the United States or the Excluded

Territories) on 17 March 2020, and that Qualifying CREST Shareholders (other than, subject to

certain exceptions, those with registered addresses in the United States or the Excluded

Territories) will receive a credit to their appropriate stock accounts in CREST in respect of the Nil

Paid Rights to which they are entitled on 18 March 2020. The Nil Paid Rights so credited are

expected to be enabled for settlement by Euroclear as soon as practicable after Admission of the

New Shares (nil paid).

In connection with the Rights Issue, the Underwriters and any of their respective affiliates may, in

accordance with applicable legal and regulatory provisions, take up a portion of the Nil Paid

Rights, the Fully Paid Rights and the New Shares in the Rights Issue as a principal position and in

that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own account in

securities of the Company and related or other securities and instruments (including Nil Paid

Rights, Fully Paid Rights and New Shares) and may offer or sell such securities otherwise than in

connection with the Rights Issue, provided that the Underwriters and their respective affiliates

may not engage in short selling for the purpose of hedging their commitments under the

Underwriting Agreement (subject to certain exceptions contained in the Underwriting

Agreement). Accordingly, references in this Prospectus to Nil Paid Rights, Fully Paid Rights and

New Shares being offered or placed should be read as including any offering or placement of Nil

Paid Rights, Fully Paid Rights and New Shares to any of the Underwriters or any of their

respective affiliates acting in such capacity. In addition, certain of the Underwriters or their

affiliates may enter into financing arrangements (including margin loans) with investors in

connection with which such Underwriters (or their affiliates) may from time to time acquire, hold

or dispose of Nil Paid Rights, Fully Paid Rights and New Shares. Except as required by applicable

law or regulation, the Underwriters do not propose to make any public disclosure in relation to

such transactions. The latest time and date for acceptance and payment in full for the New

Shares by holders of the Nil Paid Rights is expected to be 11.00 a.m. on 1 April 2020. The

procedures for delivery of the Nil Paid Rights, acceptance and payment are set out in

Part III - Terms and Conditions of the Rights Issue and (other than, subject to certain exceptions,

those with registered addresses in the United States or the Excluded Territories), for Qualifying

Non-CREST Shareholders also in the Provisional Allotment Letter and, for Qualifying AML

Nominee Service Shareholders also in the Form of Instruction. Qualifying CREST Shareholders

should refer to paragraph 2.5 of Part III - Terms and Conditions of the Rights Issue.

The Underwriters may arrange for the offer of New Shares in the United States not taken up in

the Rights Issue only to persons reasonably believed to be “qualified institutional buyers” (QIBs)

within the meaning of Rule 144A under the United States Securities Act of 1933, as amended (the

Securities Act)(Rule 144A) in reliance on an exemption from, or in a transaction not subject to,

the registration requirements of the Securities Act. The New Shares, the Nil Paid Rights and the

Fully Paid Rights offered outside the United States are being offered in reliance on Regulation S

under the Securities Act (Regulation S). Prospective investors are hereby notified that sellers of

the Nil Paid Rights, the Fully Paid Rights or the New Shares may be relying on the exemption

from registration provisions under Section 5 of the Securities Act, provided by Rule 144A

thereunder.

In addition, until 40 days after the commencement of the Rights Issue, an offer, sale or transfer

of the Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Letters, the New Shares or

the Placing Shares within the United States by a dealer (whether or not participating in the

Rights Issue) may violate the registration requirements of the Securities Act.

All Shareholders and any person (including, without limitation, a nominee or trustee) who has a

contractual or legal obligation to forward this document or any Provisional Allotment Letter, if

and when received, or other document to a jurisdiction outside the United Kingdom should read

the information set out in paragraph 2.5 of Part III - Terms and Conditions of the Rights Issue.

Notice to Overseas Shareholders

This document does not constitute an offer of Nil Paid Rights, Fully Paid Rights, New Shares or

Placing Shares to any person with a registered address, or who is located, in the United States or

the Excluded Territories or in any other jurisdiction in which such an offer or solicitation is

unlawful. The Nil Paid Rights, the Fully Paid Rights, the New Shares, the Placing Shares and the

Provisional Allotment Letters have not been and will not be registered or qualified for

distribution to the public under the relevant laws of any state, province or territory of the United

States or any Excluded Territory and may not be offered, sold, taken up, exercised, resold,

renounced, transferred or delivered, directly or indirectly, within the United States or any

Excluded Territory or in any other jurisdictions where the extension and availability of the Rights

Issue would breach any applicable law, except pursuant to an applicable exemption. See “Notice

to Investors in the United States of America” in the section titled “Important Information”.

The Nil Paid Rights, the Fully Paid Rights and the New Shares have not been and will not be

registered under the Securities Act or under any securities laws of any state or other jurisdiction

of the United States and may not be offered, sold, taken up, exercised, resold, renounced,

transferred or delivered, directly or indirectly, within the United States except pursuant to an

applicable exemption from or in a transaction not subject to the registration requirements of the

Securities Act and in compliance with any applicable securities laws of any state or other

jurisdiction of the United States. There will be no public offer of the Nil Paid Rights, the Fully

Paid Rights, the New Shares or the Placing Shares in the United States.

The Nil Paid Rights, the Fully Paid Rights, the New Shares, the Placing Shares and the Provisional

Allotment Letters have not been approved or disapproved by the United States Securities and

Exchange Commission, any state’s securities commission in the United States or any US

regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the

merits of the offering of the Nil Paid Rights, the Fully Paid Rights, the New Shares or the Placing

Shares or the accuracy or adequacy of this document. Any representation to the contrary is a

criminal offence.

iii

The Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Letters, the New Shares and

the Placing Shares have not been and will not be registered or qualified for distribution to the

public under the securities laws of any Excluded Territory and may not be offered, sold, taken up,

exercised, resold, renounced, transferred or delivered, directly or indirectly, within any Excluded

Territory or in any other jurisdictions where the extension and availability of the Rights Issue

would breach any applicable law, except pursuant to an applicable exemption from, and in

compliance with, any applicable securities laws. There will be no public offer in any of the

Excluded Territories or in any other jurisdictions where the extension and availability of the

Rights Issue would breach any applicable law.

The Nil Paid Rights, Fully Paid Rights and New Shares may not be offered or sold in Hong Kong,

by means of any document, other than (i) to “professional investors” as defined in the Securities

and Futures Ordinance (Cap.571, Laws of Hong Kong) of Hong Kong (the SFO) and any rules

made under the SFO; or (ii) in other circumstances which do not constitute an offer to the public

within the meaning of the Companies (Winding up and Miscellaneous Provisions) Ordinance

(Cap.32, Laws of Hong Kong) of Hong Kong (the C(WUMP)O) or an invitation to induce an offer

by the public to subscribe for or purchase any shares and which do not result in this document or

the Provisional Allotment Letter being a “prospectus” as defined in the C(WUMP)O. No

advertisement, invitation or document relating to the Nil Paid Rights, Fully Paid Rights, New

Shares, the Provisional Allotment Letters or this document may be issued or may be in the

possession of any person for the purpose of issue, whether in Hong Kong or elsewhere, which is

directed at, or the contents of which are likely to be accessed or read by, the public of Hong

Kong (except if permitted to do so under the C(WUMP)O and the SFO) other than with respect to

the Nil Paid Rights, Fully Paid Rights and New Shares which are or are intended to be disposed of

only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and

any rules made under the SFO or in other circumstances which do not constitute an offer or

invitation to the public within the meaning of the C(WUMP)O. The contents of this document

and the Provisional Allotment Letter have not been reviewed by any regulatory authority in

Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt

about any of the contents of this document or the Provisional Allotment Letter, you should

obtain independent professional advice.

This document is being communicated in or from Switzerland to a small number of selected

Shareholders only. Each copy of this document and/or the Provisional Allotment Letters is

addressed to a specifically named recipient and may not be copied, reproduced, distributed or

passed on to others without the Company’s prior written consent. The Nil Paid Rights, the Fully

Paid Rights and the New Shares may not be publicly offered, sold or advertised, directly or

indirectly, in or from Switzerland and will not be listed on the SIX Swiss Exchange (SIX) or on any

other stock exchange or regulated trading facility in Switzerland. This document has been

prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or

art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses

under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or

regulated trading facility in Switzerland. Neither this document nor any other offering or

marketing material relating to the Nil Paid Rights, the Fully Paid Rights and the New Shares or

the offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to the Capital Raise,

the Company, the Nil Paid Rights, the Fully Paid Rights and the New Shares have been or will be

filed with or approved by any Swiss regulatory authority. In particular, this document will not be

filed with, and the offer of Nil Paid Rights, the Fully Paid Rights and the New Shares will not be

supervised by, the Swiss Financial Market Supervisory Authority FINMA.

Notice to all investors

Any reproduction or distribution of this document, in whole or in part, and any disclosure of its

contents or use of any information contained in this document for any purpose other than

considering an investment in the Nil Paid Rights, the Fully Paid Rights or the New Shares is

prohibited. By accepting delivery of this document, each offeree of the Nil Paid Rights, the Fully

Paid Rights and/or the New Shares agrees to the foregoing.

The distribution of this document and/or the Provisional Allotment Letters and/or the transfer of

the Nil Paid Rights, the Fully Paid Rights and/or the New Shares into jurisdictions other than the

United Kingdom may be restricted by law. Persons into whose possession these documents come

should inform themselves about and observe any such restrictions. Any failure to comply with

these restrictions may constitute a violation of the securities laws of any such jurisdiction. In

particular, such documents should not be distributed, forwarded to or transmitted in or into the

United States, any of the Excluded Territories or in any other jurisdictions where the extension

and availability of the Rights Issue would breach any applicable law. The Nil Paid Rights, the Fully

Paid Rights, the New Shares and the Provisional Allotment Letters are not transferable, except in

accordance with, and the distribution of this document is subject to, the restrictions set out in

paragraph 2.5 of Part III - Terms and Conditions of the Rights Issue. No action has been taken by

the Company or by the Underwriters that would permit an offer of the New Shares or rights

thereto or possession or distribution of this document or any other offering or publicity material

or the Provisional Allotment Letters, the Nil Paid Rights, or the Fully Paid Rights in any

jurisdiction where action for that purpose is required, other than in the United Kingdom.

No person has been authorised to give any information or make any representations other than

those contained in this document and, if given or made, such information or representations

must not be relied upon as having been authorised by the Company or by the Underwriters.

Neither the delivery of this document nor any subscription or sale made hereunder shall, under

any circumstances, create any implication that there has been no change in the affairs of the

Group since the date of this document or that the information in this document is correct as at

any time subsequent to its date.

Unless explicitly incorporated by reference herein, the contents of the websites of the Group do

not form part of this document. Capitalised terms have the meanings ascribed to them, and

certain technical terms are explained, in Part X – Definitions and Glossary.

WHERE TO FIND HELP

Part II - Some Questions and Answers about the Rights Issue and the Placing of this document

answers some of the questions most often asked by shareholders about rights issues. If you have

further questions, please call the Shareholder Helpline at Equiniti on 0333 207 6530 (+44 121 415

0915 if calling from outside the United Kingdom). Calls are charged at the standard geographic

rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable

international rate. The helpline is open between 8:30 a.m. – 5.30 p.m., Monday to Friday

excluding public holidays in England and Wales. Please note that Equiniti cannot provide any

financial, legal or tax advice and calls may be recorded and monitored for security and training

purposes. Please note that, for legal reasons, the Shareholder Helpline is only able to provide

information contained in this document and information relating to the Company’s register of

members and is unable to give advice on the merits of the Capital Raise.

This document is dated 27 February 2020.

CONTENTS

Page

SUMMARY ..................................................................... 1

RISK FACTORS .................................................................. 8

IMPORTANT INFORMATION ....................................................... 35

RIGHTS ISSUE AND PLACING STATISTICS ............................................ 44

EXPECTED TIMETABLE FOR THE RIGHTS ISSUE AND THE PLACING

(1) (2)

................... 45

DIRECTORS, COMPANY SECRETARY AND ADVISERS .................................. 47

PART I - LETTER FROM THE CHAIR OF ASTON MARTIN LAGONDA GLOBAL HOLDINGS

PLC ............................................................................ 49

PART II - SOME QUESTIONS AND ANSWERS ABOUT THE RIGHTS ISSUE AND THE

PLACING ....................................................................... 63

PART III - TERMS AND CONDITIONS OF THE RIGHTS ISSUE ............................. 72

PART IV - BUSINESS OVERVIEW OF THE GROUP ...................................... 103

PART V - OPERATING AND FINANCIAL REVIEW ...................................... 124

PART VI - FINANCIAL INFORMATION OF THE GROUP ................................. 153

PART VII – UNAUDITED PRO FORMA FINANCIAL INFORMATION ........................ 297

PART VIII – TAXATION ............................................................ 302

PART IX - ADDITIONAL INFORMATION ............................................. 310

PART X – DEFINITIONS AND GLOSSARY ............................................. 375

NOTICE OF GENERAL MEETING .................................................... 385

SUMMARY

A. INTRODUCTION AND WARNINGS

A.1.1 Name and international securities identifier number (ISIN) of the securities

Ordinary shares: ISIN code GB00BFXZC448

Nil Paid Rights: ISIN code GB00BHNC9J35

Fully Paid Rights: ISIN code GB00BHNC9K40

A.1.2 Identity and contact details of the issuer, including its Legal Entity Identifier (LEI)

The Company’s legal name is Aston Martin Lagonda Global Holdings plc (the Company). The

commercial name is “Aston Martin Lagonda”. The Company’s registered address is Banbury Road,

Gaydon, Warwick CV35 0DB, United Kingdom, and its telephone number is +44 (0) 1926 644 644.

The Company’s legal entity identifier is 213800167WOVOK5ZC776.

A.1.3 Identity and contact details of the competent authority approving the prospectus

This document has been approved by the FCA, as competent authority, with its head office at 12

Endeavour Square, London, E20 1JN, and telephone number: +44 20 7066 1000, in accordance with

Regulation (EU) 2017/1129.

A.1.4 Date of approval of the prospectus

This document was approved by the FCA on 27 February 2020.

A.1.5 Warning

This summary has been prepared in accordance with Article 7 of Regulation (EU) 2017/1129 and

should be read as an introduction to this document (this document). Any decision to invest in the

Shares should be based on a consideration of this document as a whole by the investor. Any

investor could lose all or part of their invested capital and, where any investor’s liability is not

limited to the amount of the investment, it could lose more than the invested capital. Civil liability

attaches only to those persons who have tabled the summary, including any translation thereof, but

only where the summary is misleading, inaccurate or inconsistent when read together with the

other parts of this document or where it does not provide, when read together with the other parts

of this document, key information in order to aid investors when considering whether to invest in

the Shares.

B. KEY INFORMATION ON THE ISSUER

B.1 Who is the issuer of the securities?

B.1.1 Domicile, legal form, jurisdiction of incorporation, country of operation and legal entity identifier

The Company was incorporated and registered in England and Wales under the Companies Act

2006 as a private company limited by shares and under the name Aston Martin Lagonda Global

Holdings Limited on 27 July 2018 with registered number 11488166. On 7 September 2018, the

Company was re-registered as a public limited company as Aston Martin Lagonda Global Holdings

plc. Its legal entity identifier is 213800167WOVOK5ZC776.

B.1.2 Principal activities

Aston Martin is a globally recognised luxury brand and a leader in the high-luxury sports car

market. For more than a century, the brand has symbolised exclusivity, elegance, power, beauty,

sophistication, innovation, performance and an exceptional standard of styling and design. Its cars

sit solely within the HLS car market segment and the Group’s market leadership position is

supported by award-winning design and engineering capabilities, world-class technology and

state-of-the-art facilities, creating distinctive model line-ups.

The Group sells cars worldwide, primarily from its main manufacturing facility and corporate

headquarters in Gaydon, England, and is currently ramping up pre-production in its second

manufacturing facility in St. Athan, Wales. The Group’s current core line-up comprises three models

of the new generation of products: the grand tourer – DB11; the sports car – Vantage; and the

super grand tourer – DBS Superleggera.

All of the Group’s models currently sit under the Aston Martin brand, and some models are

available with different options, including engine size and body type (such as coupe and convertible

models).

In November 2019, Aston Martin Lagonda unveiled its fourth new core model and first SUV, DBX.

Pre-production builds of DBX started as planned in the Group’s production facility located in St.

Athan, Wales and launch is planned for the second quarter of 2020. The DBX order book has built

rapidly, with approximately 1,800 orders from when it opened on 20 November 2019 to 7 January

2020, with approximately 1,200 of those orders being a combination of customer orders and

specifications in progress and approximately 600 dealer-specified to maintain the successful launch

of DBX including customer test cars, marketing cars and showroom cars. The order book has

continued to build, with total orders taken as at the date of this document in excess of the planned

DBX retail target for 2020.

The Group has also confirmed production of its new hypercars, the Aston Martin Valkyrie and Aston

Martin Valkyrie AMR Pro, which establishes a mid-engine platform for Aston Martin and which is

expected to continue with the unveiling of Valhalla in 2022 and of the Vanquish in 2023. The Group

also regularly develops and produces special limited edition models (which will continue to be a

focus), alongside a new range of heritage vehicles.

B.1.3 Major shareholders

Insofar as is known to the Company, the name of each person who, directly or indirectly, has an

interest in 3.0 per cent. or more of the Company’s issued share capital, and the amount of such

person’s interest, as at 21 February 2020 (being the latest practicable date prior to the publication

of this document) are as follows:

Name No. %

Prestige/SEIG Shareholder Group ....................

67,582,104 29.64

Adeem/PW Shareholder Group ......................

62,899,356 27.59

Invesco Limited ...................................

20,696,200 9.15

Mercedes-Benz AG ................................

9,529,739 4.18

Torreal Sociedad de Capital Resigo, S.A. ..............

7,151,411 3.14

Insofar as is known to the Company, immediately following the Capital Raise, the interests of those

persons with an interest in 3.0 per cent. or more of the Company’s issued share capital, including as

a percentage of the enlarged share capital (assuming 100 per cent. take up by such persons of their

entitlements under the Rights Issue (except in the case of the Adeem/PW Shareholder Group and

the Yew Tree Consortium) and no options granted under the Share-Based Incentive Plans are

exercised between 21 February 2020 (being the latest practicable date prior to the publication of

this document) and the completion of the Capital Raise), will be as follows:

Name No. %

Prestige/SEIG Shareholder Group

(1)

................... 105,428,082 24.7

Yew Tree Consortium

(2)

............................ 92,658,875 21.7

Adeem/PW Shareholder Group

(3)

.................... 76,601,021 17.9

Invesco Limited. ................................... 32,286,072 7.6

Mercedes-Benz AG

(4)

............................... 14,866,393 3.5

Torreal Sociedad de Capital Riesgo, S.A.

(5)

............ 11,156,201 2.6

Notes:

(1) The Prestige/SEIG Shareholder Group has irrevocably undertaken to take up 100 per cent. of its

entitlements under the Rights Issue.

(2) The expected shareholding of the Yew Tree Consortium assumes it takes up 100 per cent. of its

entitlements under the Rights Issue (which it has irrevocably undertaken to do), as well as the

entitlements in respect of the Nil Paid Rights that it has agreed to purchase from the Adeem/PW

Shareholder Group.

(3) The expected shareholding of the Adeem/PW Shareholder Group assumes it takes up 38.9 per

cent. of its entitlements under the Rights Issue. The Adeem/PW Shareholder Group has agreed to

sell such number of Nil Paid Rights to the Yew Tree Consortium which will result in (i) the Adeem/

PW Shareholder Group taking up 38.9 per cent. of its entitlements under the Rights Issue and (ii)

the Yew Tree Consortium taking up the remainder of the Adeem/PW Shareholder Group’s

entitlements.

(4) Mercedes-Benz AG has irrevocably undertaken to take up 100 per cent. of its entitlements under

the Rights Issue.

(5) Torreal Sociedad de Capital Riesgo, S.A. has irrevocably undertaken to take up 100 per cent. of

its entitlements under the Rights Issue.

B.1.4 Key managing directors

Dr. Andrew Palmer is the President and Group Chief Executive Officer of the Company and Mark

Wilson is the Chief Financial Officer and Executive Vice President of the Company.

B.1.5 Identity of the statutory auditors

Ernst & Young LLP, with its address at 1 Colmore Square, Birmingham B4 6HQ, United Kingdom, is

the statutory auditor to the Company. The financial information for the Group as of and for the

year ended 31 December 2019 included in this document was audited by Ernst & Young LLP.

The financial information for the Group as of and for the year ended 31 December 2018 contained

herein was audited by KPMG LLP.

B.2 What is the key financial information regarding the issuer?

The tables below set out the Group’s summary financial information for the periods indicated.

The financial information set forth below is extracted or derived from, and should be read in

conjunction with, the audited consolidated financial statements of the Company as of and for the

year ended 31 December 2019 and the audited consolidated financial statements of the Company

as of and for the year ended 31 December 2018, each included in this document.

The following table sets forth the Group’s main operating results, extracted from the 2019 Financial

Statements and the 2018 Financial Statements, and shows these items as a percentage of total

revenue.

2017

(1)

2018 2019

(£

millions)

(% of

total

revenue)

(£

millions)

(% of

total

revenue)

(£

millions)

(% of

total

revenue)

(audited)

Consolidated Statement of Comprehensive

Income Data:

Revenue ................................. 876.0 100.0 1,096.5 100.0 997.3 100.0

Cost of sales .............................. (496.2) (56.6) (660.7) (60.3) (642.7) (64.4)

Gross profit .............................. 379.8 43.4 435.8 39.7 354.6 35.6

Selling and distribution expenses ............ (60.0) (6.8) (89.8) (8.2) (95.0) (9.5)

Administrative and other operating

expenses ............................... (171.0) (19.5) (293.2) (26.7) (277.3) (27.8)

Other income/(expense) .................... – – 20.0 1.8 (19.0) (1.9)

Operating profit/(loss) ..................... 148.8 17.0 72.8 6.6 (36.7) (3.7)

Finance income ........................... 35.6 4.1 4.2 0.4 16.3 1.6

Finance expense

(2)

......................... (99.9) (11.4) (145.2) (13.2) (83.9) (8.4)

Profit/(loss) before tax ..................... 84.5 9.6 (68.2) (6.2) (104.3) (10.5)

Income tax (charge)/credit .................. (7.7) (0.9) 11.1 1.0 (0.1) 0.0

Profit/(loss) for the year ................... 76.8 8.8 (57.1) (5.2) (104.4) (10.5)

Notes:

(1) Restated to reflect the adoption of IFRS 15.

(2) Finance expense includes interest expense with respect to the Preference Shares. The Preference Shares were converted into

ordinary shares as part of the AML IPO. Interest expense with respect to the Preference Shares was £37.9 million and

£93.9 million (including £32.0 million of interest expense and £61.9 million of costs in relation to the conversion of the

Preference Shares as part of the AML IPO) in 2017 and 2018, respectively. The following table presents the above line items

from finance expense through to profit/(loss) for the year, as adjusted to exclude the impact of the Preference Shares:

2017 2018 2019

(£ millions)

(unaudited) (audited)

Finance expense, excluding impact of the Preference Shares ....................... (62.0) (51.3) (83.9)

Profit/(loss) before tax, excluding impact of the Preference Shares .................. 122.4 25.7 (104.3)

Income tax (charge)/credit, excluding impact of the Preference Shares

(1)

............. (7.7) 8.2 (0.1)

Profit/(loss) for the year, excluding impact of the Preference Shares ................ 114.7 33.9 (104.4)

Note:

(1) The estimated reduction in the tax credit attributable to the impact of excluding the Preference Share interest for the

year ended 31 December 2018 would be £2.9 million.

The following table sets out the condensed consolidated statement of financial position as at the

dates indicated:

As at 31 December

2017

(1)

2018 2019

(£ millions)

(audited, unless otherwise indicated)

Non-current assets ..................................... 1,213.8 1,418.6

(2)

1,663.6

Current assets ......................................... 418.3 551.6 567.5

Total assets .......................................... 1,632.1 1,970.2

(2)

2,231.1

Current liabilities ....................................... (529.5) (790.3)

(2)

(858.2)

Non-current liabilities ................................... (966.5) (730.5)

(2)

(1,014.0)

Total liabilities ......................................... (1,496.0) (1,520.8)

(2)

(1,872.2)

Net assets ............................................. 136.1 449.4 358.9

Equity attributable to owners of the group ................ 128.5 439.2 344.8

Non-controlling interests ................................ 7.6 10.2 14.1

Total shareholders equity ............................... 136.1 449.4 358.9

Note:

(1) Restated to reflect the adoption of IFRS 15.

(2) Certain reclassifications have been made in the statement of financial position in the 2019 Financial Statements regarding the

2018 comparative values. These restated items are unaudited.

The following table sets out the condensed consolidated statement of cash flows for the periods

indicated:

2017

(1)

2018 2019

(£ millions)

(audited)

Net cash inflow from operating activities ......................... 344.0 222.6

(2)

19.4

Net cash used in investing activities .............................. (346.4) (306.3) (305.2)

Net cash inflow from financing activities .......................... 69.9 57.8 243.3

Net increase/(decrease) in cash and cash equivalents ................ 67.3 (25.9) (42.5)

Cash and cash equivalents at the beginning of the year ............. 101.7 167.8 144.6

Effect of exchange rates on cash and cash equivalents .............. (1.2) 2.7 5.8

Cash and cash equivalents at the end of the year .................. 167.8 144.6 107.9

Note:

(1) Restated to reflect the adoption of IFRS 15.

(2) A reclassification has been made in the statement of cash flows in the 2019 Financial Statements regarding

the 2018 comparative values of £7.2 million cash inflow from Movement in provisions to Decrease in trade and

other payables. This had no impact on the cash generated from operations.

There are no qualifications in the audit opinions on the historical financial information included in

this document.

B.3 What are the key risks that are specific to the issuer?

The Group is dependent on the proceeds of the Capital Raise for its liquidity, working capital and

the reset of the business plan and, absent such proceeds, the Group will have an immediate

working capital shortfall and therefore the Company and key trading companies in the Group could

enter into administration shortly thereafter, which could be as early as the next six months, and

which could result in the loss by Shareholders of all or part of their investment in the Company.

Aston Martin Lagonda currently has a significant amount of outstanding debt with substantial debt

service requirements which could have important consequences for its business and operations.

Aston Martin Lagonda’s business model assumes the Wholesale Finance Facility is available on an

ongoing basis, which involves certain liquidity risks, and the loss of the Group’s ability to draw

under this or a similar facility or its credit insurance backing could adversely affect its liquidity and

therefore have a material adverse effect on its business.

Aston Martin Lagonda’s future success depends on its continued ability to introduce its next

generation of cars, which will require significant capital expenditures and will depend in large part

on consumers’ acceptance of the new car offerings, as well as the Group’s ability to complete its car

launch schedule on the contemplated timeline.

Aston Martin Lagonda’s success depends on the continued popularity of its existing products and its

ability to provide its customers with new, attractive products tailored to their needs. These new

products may not achieve the level of consumer acceptance that the Company anticipates.

Aston Martin Lagonda is dependent on its primary manufacturing facility at Gaydon for the

production of its three current core models and it may incur unanticipated costs or delays in

ramping up its plant in St. Athan for full production of DBX.

Aston Martin Lagonda’s future success depends on its ability to continue to sell its cars to customers

at prices which reflect the cost of maintaining the high quality of its cars. Pricing pressure could

limit Aston Martin Lagonda’s ability to pass on production costs to its customers.

The Group’s profitability relies in part upon its ability to produce and deliver its special edition

models. If the Group is delayed or becomes unable to deliver these models in the applicable time

frames, this could lead to additional costs, reduced profitability, return of customer deposits and

damage to the Group’s reputation.

The strength of the Aston Martin brand could be diluted or weakened by a failure to continue to

produce cars of appropriate performance, aesthetics and quality, failure to keep up with new

technologies, quality issues or recalls, dealers promoting other manufacturers’ cars in priority to

Aston Martin Lagonda’s and counterfeit cars and parts affecting performance and quality

perceptions.

The Group may not be able to realise cost savings, reduce capital expenditure or balance supply and

demand effectively in line with its strategy. Aston Martin Lagonda’s ability to successfully

implement its strategy will depend on, at least in part, its ability to reduce costs without

diminishing the quality of its cars, as well as to reduce capital expenditures without limiting its

ability to introduce new cars in line with changes in trends and advances in technology. An inability

to achieve these goals could result in increased costs, damage to the Aston Martin brand, decreased

sales and/or liquidity constraints.

C. KEY INFORMATION ON THE SECURITIES

C.1 What are the main features of the securities?

C.1.1 Type, class and ISIN

Following the passing of the Resolutions at the General Meeting, the Company will issue and allot

to Yew Tree Overseas Limited (Yew Tree), an entity owned and controlled by Lawrence Stroll, as

well as entities owned and controlled by each of Michael de Picciotto, André Desmarais and his

family, Silas Chou (via Yew Tree), John Idol and Lord Anthony Bamford and John McCaw (together,

the Yew Tree Consortium), in aggregate 45,600,577 new ordinary shares of £0.009039687 each in

the capital of the Company (the Placing Shares) at an issue price of 400 pence per Placing Share.

This represents a discount of 0.67 per cent. to the closing price of 402.7 pence per ordinary share of

the Company (Shares) on 30 January 2020, the last Business Day before the Capital Raise was

announced to the market.

Pursuant to the Rights Issue, the Company will issue 153,217,942 new ordinary shares of

£0.009039687 each in the capital of the Company (the New Shares). The Rights Issue will be made

on the basis of 14 New Shares for every 25 existing ordinary share in the Company (the Existing

Shares).

When admitted to trading, the New Shares and the Placing Shares (all of which are ordinary shares)

will be registered with ISIN number GB00BFXZC448 and SEDOL number BFXZC44 and trade under

the symbol “AML”. The ISIN for the Nil Paid Rights will be GB00BHNC9J35 and the ISIN for the Fully

Paid Rights will be GB00BHNC9K40.

C.1.2 Currency, denomination, par value, number of securities issued and duration

The currency of the issue is United Kingdom pounds sterling.

Immediately prior to the publication of this document, the share capital of the Company was

£2,061,074.76, comprised of 228,002,890 Existing Shares of £0.009039687 each, all of which were

fully paid or credited as fully paid.

The issued and fully paid share capital of the Company immediately following completion of the

Placing and the Rights Issue (together, the Capital Raise), assuming that no Rights are issued as a

result of the exercise of any options between 21 February 2020 and the completion of the Rights

Issue, is expected to be £3,858,332, comprising 426,821,409 Shares of £0.009039687 each.

C.1.3 Rights attached to the Shares

The New Shares and the Placing Shares will, when issued and fully paid, rank equally in all respects

with the Existing Shares, including the right to receive all dividends and other distributions made,

paid or declared after the date of issue of the New Shares and the Placing Shares, as applicable.

C.1.4 Rank of securities in the issuer’s capital structure in the event of insolvency

The Shares do not carry any rights to participate in a distribution (including on a winding-up) other

than those that exist under the Companies Act 2006. The New Shares, the Placing Shares and the

Existing Shares will rank pari passu in all respects.

C.1.5 Restrictions on the free transferability of the securities

There are no restrictions on the free transferability of the Shares.

C.1.6 Dividend or payout policy

The Group is focused on improving its liquidity position, strengthening its balance sheet and

successfully executing the reset of the business plan. It is therefore the Directors’ intention during

the current phase of the Group’s development to retain the Group’s cash flow to achieve these

objectives. The Directors intend to review, on an ongoing basis, the Company’s dividend policy and

will consider the payment of dividends as the Group’s strategy matures, depending upon the

Group’s free cash flow, financial condition, future prospects and any other factors deemed by the

Directors to be relevant at the time.

C.2 Where will the securities be traded?

Application will be made to the FCA for the New Shares (nil paid and fully paid) and the Placing

Shares to be admitted to the premium listing segment of the Official List of the FCA and to the

London Stock Exchange for such Shares to be admitted to trading on the London Stock Exchange’s

main market for listed securities.

C.3 What are the key risks that are specific to the securities?

Risks relating to the Shares

The Major Shareholders and the Yew Tree Consortium will have significant interests in the

Company following the Capital Raise, and their interests may differ from those of other

Shareholders.

If the Major Shareholders, the Yew Tree Consortium, the Directors and/or certain other

Shareholders purchase additional Nil Paid Rights and/or Fully Paid Rights during the Rights Issue

offer period, the Company may cease to comply with the free float requirement under Listing Rule

6.14, and therefore, absent a modification from the FCA, the Shares may be suspended or cancelled

from the premium listing segment of the Official List in order to maintain the smooth operation of

the market or to protect investors.

The market price of the Nil Paid Rights, the Fully Paid Rights and/or the Shares could be subject to

significant fluctuations due to a change in sentiment in the market regarding the Nil Paid Rights,

the Fully Paid Rights and/or the Shares (or securities similar to them), including, in particular, in

response to various facts and events, including any regulatory changes affecting the Group’s

operations, variations in the Group’s operating results and/or business developments of the Group

and/or its competitors.

Shareholders who do not acquire New Shares in the Rights Issue will experience dilution in their

ownership of the Company, and all Shareholders will experience dilution as a result of the Placing.

D. KEY INFORMATION ON THE ADMISSION TO TRADING ON A REGULATED MARKET

D.1 Under which conditions and timetable can I invest in this security?

It is expected that Admission of the New Shares (nil paid) will become effective on 18 March 2020

and that dealings in New Shares will commence, nil paid, as soon as practicable after 8.00 a.m. on

that date.

It is expected that Admission of the Placing Shares will become effective on 17 March 2020 and that

dealings in Placing Shares will commence as soon as practicable after 8.00 a.m. on that date.

The Company proposes to issue 153,217,942 New Shares in connection with the Rights Issue.

Pursuant to the Rights Issue, New Shares will be offered by way of rights to Qualifying Shareholders

on the terms and conditions set out in this document and, in the case of Qualifying Non-CREST

Shareholders only, the Provisional Allotment Letter. The offer is to be made at 207 pence per New

Share, payable in full on acceptance by no later than 11.00 a.m. on 1 April 2020. The Issue Price

represents a discount of 47 per cent. to the closing price of 391 pence per Share on 26 February

2020 (the last Business Day before the publication of this document), and a discount of 36 per cent.

to the theoretical ex-rights price of 325 pence per Share by reference to the closing price on the

same basis.

The Rights Issue will be made on the basis of 14 New Shares at 207 pence per New Share for every

25 Existing Shares held on the Record Date (and so in proportion for any other number of Existing

Shares then held) and otherwise on the terms and conditions as set out in this document and, in the

case of Qualifying Non-CREST Shareholders also in the Provisional Allotment Letters and, for

Qualifying AML Nominee Service Shareholders also in the Forms of Instruction.

Following the passing of the Resolutions at the General Meeting, the Yew Tree Consortium will

subscribe for, and the Company will issue and allot to the Yew Tree Consortium, 45,600,577 Placing

Shares at an issue price of 400 pence per Placing Share. This represents a discount of 0.67 per cent.

to the closing price of 402.7 pence per Share on 30 January 2020, the last Business Day before the

Capital Raise was announced to the market. The Placing is conditional on the Resolutions being

duly passed at the General Meeting, Admission of the Placing Shares occurring at or before 8.00

a.m. on 17 March 2020, none of the warranties or undertakings in the Placing Agreement being

breached and none of the warranties becoming untrue, inaccurate or misleading.

Shareholders will experience a dilution of their shareholding in the Company of 16.67 per cent. as a

result of the Placing.

D.2 Why is this document being produced?

The Company proposes to issue 153,217,942 New Shares in connection with the Rights Issue and

45,600,577 Placing Shares in connection with the Placing.

Through the issue of the New Shares and the Placing Shares, the Company expects to raise gross

proceeds of £500 million. The aggregate expenses of, or incidental to, the Capital Raise to be borne

by the Company are estimated to be approximately £15 million, which the Company intends to pay

out of the proceeds of the Capital Raise.

The Company intends to use the net proceeds from the Capital Raise to improve liquidity, finance

the ramp-up in production of DBX and deliver the turnaround of the Company’s performance. The

Group will use a portion of the net proceeds of the Placing to refund the £55.5 million of short-

term working capital support provided by Yew Tree to the Group in early February 2020 and

between £70 million and £100 million to fund the working capital needs of the business in the first

half of 2020 to facilitate the delivery of DBX, Valkyrie and other special editions in 2020. The

remaining approximately £329.5 million to £359.5 million will be used for general corporate

purposes in support of the reset of the business plan.

RISK FACTORS

The Capital Raise and any investment in the New Shares, the Nil Paid Rights and/or the Fully Paid

Rights are subject to a number of risks. Accordingly, Shareholders and prospective investors

should carefully consider the factors and risks associated with any investment in the New Shares,

the Nil Paid Rights and/or the Fully Paid Rights, the Group’s business and the industry in which it

operates, together with all other information contained in this document and all of the

information incorporated by reference into this document, including, in particular, the risk

factors described below, and their personal circumstances prior to making any investment

decision. Some of the following factors relate principally to the Group’s businesses. Other factors

relate principally to the Capital Raise and an investment in the New Shares, the Nil Paid Rights

and/or the Fully Paid Rights. The Group’s businesses, operating results, financial condition and

prospects could be materially and adversely affected by any of the risks described below. In such

case, the market price of the Nil Paid Rights, the Fully Paid Rights and/or the New Shares may

decline and investors may lose all or part of their investment.

Prospective investors should note that the risks relating to the Group, its industry and the New

Shares, the Nil Paid Rights and/or the Fully Paid Rights summarised in the section of this

document headed “Summary” are the risks that the Directors believe to be the most essential to

an assessment by a prospective investor of whether to consider an investment in the New Shares,

the Nil Paid Rights and/or the Fully Paid Rights. However, as the risks which the Group faces

relate to events and depend on circumstances that may or may not occur in the future,

prospective investors should consider not only the information on the key risks summarised in the

section of this document headed “Summary” but also, among other things, the risks and

uncertainties described below.

The following is not an exhaustive list or explanation of all risks which investors may face when

making an investment in the New Shares, the Nil Paid Rights and/or the Fully Paid Rights and

should be used as guidance only. Additional risks and uncertainties relating to the Group that are

not currently known to the Group, or that it currently deems immaterial, may individually or

cumulatively also have a material adverse effect on the Group’s business, prospects, operating

results and financial condition and, if any such risk should occur, the price of the New Shares, the

Nil Paid Rights and/or the Fully Paid Rights may decline and investors could lose all or part of

their investment. Investors should consider carefully whether an investment in the New Shares,

the Nil Paid Rights and/or the Fully Paid Rights is suitable for them in the light of the information

in this document and their personal circumstances.

Risks relating to the business and industry of the Group

The Group is dependent on the proceeds of the Capital Raise for its liquidity, working capital

and the reset of the business plan and, absent such proceeds, the Group will have an immediate

working capital shortfall and therefore the Company and key trading companies in the Group

could enter into administration shortly thereafter, which could be as early as the next six

months. Even if near-term liquidity challenges can be alleviated, without the proceeds of the

Capital Raise the Group faces further liquidity risks over the medium and long terms.

Without the proceeds of the Capital Raise, the Company will have an immediate liquidity

shortfall and be unable to fund its short-term working capital needs required for the reset of the

business plan. In this scenario, the Group would put in place an action plan to mitigate the

immediate working capital shortfall, which would first involve extending the period of payments

to various suppliers, together with ceasing all near-term discretionary investment in vehicle

development.

The mitigating actions would lead to faster sales decay profiles of current models, as well as

reduced performance, delays to, or the outright cancellation of, one or more future model

programmes, which the Directors believe is not a credible option should the Group wish to

continue trading. If the Group were forced to cancel any orders for which customers have

prepaid a deposit, the Group would be liable to return the deposits in respect of those cancelled

orders. As of 31 December 2019, the Group held £78.5 million of refundable customer deposits

and advances. Despite these changes to the business plan, the Company and key trading

companies in the Group could still be required to enter into administration or liquidation shortly

thereafter.

In addition, the Group would need to seek alternative financing arrangements. The Group has

the option, on or prior to 15 July 2020, to draw an additional $100 million in aggregate principal

amount of either 12.0 per cent. delayed draw senior secured split coupon notes due 2022 and/or

15.0 per cent. delayed draw senior unsecured split coupon notes due 2022 if certain conditions

were met (the Delayed Draw Notes). However, the Delayed Draw Notes alone would not be

sufficient to cover the immediate liquidity shortfall and would lead to the further deterioration

of the Group’s financial position given the punitive interest cost.

The Company is not currently discussing with potential lenders any further arrangements and

believe that the terms of any new arrangements, if available at all, and particularly given the

Group’s continuing deterioration in credit position (highlighted by the recent Moody’s

downgrade to Caa1 on 14 January 2020), would likely be significantly more expensive and

onerous than those which apply under the Group’s existing financing arrangements. The Group

would also have to seek other forms of funding, such as a new equity restructuring, which may

result in a material dilution of the equity interests of Shareholders in the Company.

Furthermore, even if steps are taken to alleviate the near-term liquidity challenges, increased

awareness of the Group’s challenged financial situation could lead to an increase in customer and

supplier concerns around the Group’s continued viability. This could prompt weakened credit

terms with suppliers, which could cause a significant cash outflow. As at 31 December 2019, trade

creditors for the Group were £138.5 million, so a reduction in settlement times would result in

material incremental working capital pressure and consequent funding requirements, with no

certainty that they could be met.

Given the immediate working capital shortfall in the event the Capital Raise does not successfully

complete, despite the Board and the boards of the relevant Group companies taking immediate

restructuring action, the Company and key trading companies in the Group may enter into

administration or liquidation in the near term, which could be as early as the next six months.

Even if the near-term liquidity challenges can be alleviated, the Group would experience a

significant liquidity shortfall within the next 18 months in the event the Capital Raise does not

successfully complete if a reasonable downside scenario were to occur, even despite mitigating

actions being effected by the boards of the relevant Group companies.

Consequently, the Group is exposed to significant liquidity risks over the near, medium and long

terms in the absence of the proceeds of the Capital Raise which, without such proceeds, could

result in the loss by Shareholders of all or part of their investment in the Company.

Aston Martin Lagonda’s significant leverage may make it difficult for the Group to operate its

business.

Aston Martin Lagonda currently has a significant amount of outstanding debt with substantial

debt service requirements. As of 31 December 2019, the Group’s net financial indebtedness was

£884.9 million, of which £829.9 million (2018: £590.9 million) relates to the Senior Secured Notes

which mature in April 2022. The in-year increase is attributable to the Group issuing the $190m

6.5% Notes due 2022 in April 2019 and the $150m 12.0% Notes due 2022 in October 2019, in

addition to foreign currency movements on US dollar-denominated borrowings and the

amortisation of transaction costs on existing borrowings through the effective interest rate. In

addition, the Group’s Revolving Credit Facility Agreement, which provides for £80 million in

committed financing, will mature on 15 January 2022. The Group expects to have a substantial

amount of outstanding debt going forward. The Group’s leverage could have important

consequences for its business and operations, including, but not limited to:

• requiring it to dedicate a substantial portion of its cash flow from operations to payments

on its debt, thus reducing the availability of its cash flow to fund its capital expenditures

and for other general corporate purposes;

• increasing its vulnerability to an economic downturn or to general economic or industry

conditions;

• placing it at a competitive disadvantage relative to competitors that have lower leverage

or greater financial resources than it has;

• limiting its flexibility in planning for or reacting to competition or changes in its business

and industry;

• negatively impacting credit terms;

• restricting it from pursuing or exploiting certain business opportunities; and

• limiting, among other things, its ability to borrow additional funds or raise capital in the

future and increasing the costs of such additional financings.

These factors, and others arising from the Group’s leverage, impose constraints on the future

development of the Group and could have a material adverse effect on its profitability and

prospects. In addition, the Group’s ability to refinance its indebtedness in the future will depend

on the Group’s future operating performance and ability to generate cash from operations. Its

ability to generate cash from operations is subject, in part, to continuing general economic,

competitive, legislative and regulatory factors and other factors that are beyond the Group’s

control.

The Group’s ability to refinance its debt will be particularly heightened in the year leading up to

15 April 2022, as £829.9 million of the Group’s net financial indebtedness will come due at that

time and its Revolving Credit Facility will mature on 15 January 2022. Any refinancing of the

Group’s debt could be at higher interest rates than its current debt and may require the Group to

comply with more onerous covenants, which could further restrict its business operations. If the

Group is not able to refinance any of its debt or obtain additional financing on commercially

reasonable terms, the Group’s business, financial condition and results of operations would be

materially adversely affected.

Moreover, the Group is subject to various types of restrictions or impediments on the ability of

Group companies in certain countries to remit cash across the Group. These restrictions or

impediments are caused by exchange controls, withholding taxes on dividends and distributions

and other similar restrictions in the markets in which the Group operates. For example, in China,

due to exchange controls, the Group has had to enter into a series of one year back-to-back loan

arrangements with HSBC Bank plc, whereby Chinese renminbi are deposited in an escrow account

with HSBC Bank plc in China in exchange for a sterling overdraft facility with HSBC Bank plc in

the United Kingdom. If the Group were unable to maintain this or other similar arrangements to

extract its cash from China, the Group may face an adverse effect on the profitability and

prospects of its business in China.

Aston Martin Lagonda’s business model assumes the Wholesale Finance Facility is available on

an ongoing basis, which involves certain liquidity risks, and the loss of the Group’s ability to

draw under this or a similar facility or its credit insurance backing could adversely affect its

liquidity and therefore have a material adverse effect on its business.

The Group is a party to a Wholesale Finance Facility pursuant to which it offers to Standard

Chartered Bank certain receivables owing to them by dealers who have acquired Aston Martin

Lagonda cars from them on credit terms not exceeding 270 days from the date of dispatch.

Where this facility is used (i.e., where Standard Chartered Bank purchases the receivables offered

to them), the Group receives from Standard Chartered Bank the purchase price of a car less a

discount rate (calculated in accordance with the Wholesale Finance Facility agreement) following

issuance of an invoice to the dealer (and subject to satisfaction of certain other requirements).

The dealer is instructed to make payment of amounts due under that invoice to an account of

Standard Chartered Bank and amounts paid to that account are recovered and retained by

Standard Chartered Bank. The Group is required to pay Standard Chartered Bank a flat fee for

providing the Wholesale Finance Facility on a quarterly basis for the duration of the facility. The

Group re-charges any discount rate approved by Standard Chartered Bank and other fees

associated with the facility to its dealers from time to time. The Wholesale Finance Facility is

backed by a credit insurance contract between the Group and its insurer, Atradius Credit

Insurance NV, in the event that a dealer fails to repay its financing under this scheme. The

Group’s direct liability in respect of dealer default under the Wholesale Finance Facility (in the

event that the credit insurance does not cover the default) where the Group is required to

repurchase the relevant receivable is limited to an aggregate of £200,000 over the period ending

31 August 2020. Although the Wholesale Finance Facility is backed by credit insurance, in

exceptional circumstances, after thorough consideration of the credit history of an individual

dealer, the Group may sell cars to the dealer outside the credit risk insurance policy or on

deferred payment terms. To the extent that the Group suffers loss or damage that is not covered

by insurance or which exceeds its insurance coverage, the Group’s financial condition may be

affected. Further the Group relies on drawings under this facility to minimise the impact of the

delay between shipment and receipt of funds. As of 31 December 2019, the Group had drawn

£99.6 million under its Wholesale Finance Facility.

The Wholesale Finance Facility is subject to renewal in August 2020, and the Group is currently

negotiating the terms of this renewal. If no agreement regarding the terms of renewal are

reached, or the facility (or any of the Group’s other Inventory Funding Facilities) otherwise

became unavailable or available in reduced amounts, the Group may need to sell cars to dealers

without such financing arrangements, subjecting it to the credit risk of its counterparties and

additional adverse financial effects. Any of the foregoing could materially negatively impact the

Group’s operations. As of the year ended 31 December 2019, the Group had £47.3 million in

receivables overdue by 31 days or more, of which a credit loss provision of £20.2 million is held.

Aston Martin Lagonda’s future success depends on its continued ability to introduce its next

generation of cars, which will require significant capital expenditures.

New model introductions and refurbishments drive customer visits to the Group’s dealers’

showrooms and sales. The current model line-up comprises three core models from the new

range, including one GT (the DB11), one sports car (the Vantage) and one super GT (DBS

Superleggera). In order to meet its sales goals, the Group must continue to invest heavily in car

and powertrain design, engineering and manufacturing. In 2019, the Group’s capital

expenditures were £310.2 million and are expected to be approximately £285 million in 2020. The

Group’s ability to realise acceptable returns on these investments will depend in large part on

consumers’ acceptance of the new car offerings, as well as the Group’s ability to complete its car

launch schedule on the contemplated timeline.

The Group intends to develop most of its future models based on its modular architecture, which

employs a ‘Carry Over-Carry Across’ principle for key systems and components and allows for

flexible and profitable manufacturing at low volumes and easy adaptation to new models with

limited additional investment, or by way of collaboration with other manufacturers, as the Group

has done in the past on an opportunistic basis. However, the Group must undertake significant

upfront investments in order to launch new models and update existing models, which could

include design, engineering and manufacturing costs. In some cases, this could include the

acquisition or building of new facilities. In order to make such large capital expenditures, the

Group must either have sufficient cash from operations or raise funding from outside sources,

which may not be available on commercially reasonable terms or in an amount sufficient to

enable the Group to raise such funds, or may not be available at all.

If the Group’s new cars or upgraded variants of its existing models are not received favourably by

consumers, the Group’s car sales, market share and profitability will suffer. If the Group is

required to cut capital expenditure due to insufficient car sales, liquidity constraints, decreasing

profitability or for any other reason, its ability to continue its programme of developing the next

generation of cars and keep pace with product and technological innovations would diminish,

which could reduce demand for the Group’s cars and negatively impact its business, brand and

results of operations.

Aston Martin Lagonda’s future success depends on its ability to develop attractive products that

are tailored to the needs and tastes of its customers.

Aston Martin Lagonda’s success depends on the continued popularity of its existing products and

its ability to provide its customers with new, attractive products tailored to their needs. These

new products may not achieve the level of consumer acceptance that the Company anticipates.

The success of Aston Martin Lagonda is influenced to a significant extent by the image,

perception and recognisability of its cars. As Aston Martin Lagonda expands from its traditional

focus on sports cars in favour of a wider range of high-luxury automobiles (e.g. the recent

unveiling of its new SUV, DBX), the continued success of Aston Martin Lagonda will also depend

on the market’s acceptance of Aston Martin Lagonda’s expansion into these new areas and

deviation from its more traditional segments and designs.

Trends affecting consumer demand may depend on factors such as disposable income, brand

prestige and environmental consciousness (including a preference against high-emission cars),

some of which are difficult to plan for and may be influenced by popular media. Aston Martin

Lagonda must continue to identify trends in customer needs and tastes in sufficient time to react

to these changes (including by adapting its strategy and business plan as necessary) and thus

strengthen its market position and expand into new segments. A misjudgement or delayed

recognition of trends and customer needs and tastes in individual markets or other changes in

requirements could lead to a decline in demand, sales and profitability of Aston Martin

Lagonda’s products in the short term and, over the long term, damage its brand. It could also

lead to significantly unprofitable investments and associated costs. These risks could be

exacerbated by the relatively small scale of Aston Martin Lagonda’s operations.

In addition, demand for Aston Martin cars and, in particular, the Group’s heritage range and

special edition models, relies on Aston Martin Lagonda’s strong relationship with the active

global community of automotive collectors and enthusiasts. If there is a change in collector

appetite or support among automobile enthusiasts for the Aston Martin brand, the Group’s ties

to (and the support it receives from) this community may be diminished, which could harm the

perception of the Aston Martin brand and may result in a reduction in product sales that could

affect the Group’s profitability.

Aston Martin Lagonda is dependent on its primary manufacturing facility at Gaydon for the

production of its three current core models and it may incur unanticipated costs or delays in

ramping up its plant in St. Athan for full production of DBX.

Currently, the three core model vehicles that the Group sells (DB11, Vantage and DBS

Superleggera) and some sub-assemblies for aftermarket parts, such as seats and bodies, are

manufactured at the Gaydon facility. The Group’s fourth core model (DBX) will be manufactured

at the manufacturing facility in St. Athan, Wales. Pre-production of DBX at the St. Athan

manufacturing facility commenced in 2019 while the plant is being ramped up and tested for full

production. The Gaydon facility could become permanently or temporarily unusable, including

due to fire, contamination, power shortage or strikes. Alternatively, changes in law and

regulation, including export, tax and employment laws and regulations, or economic conditions,

including inflation, could make it uneconomic for Aston Martin Lagonda to continue

manufacturing its cars in the United Kingdom. If Aston Martin Lagonda was unable to

manufacture cars, or only able to manufacture cars in limited numbers, at the Gaydon facility or

it became uneconomic for it to continue to manufacture cars at Gaydon, it would need to seek

alternative manufacturing arrangements, which would take time and therefore may reduce

Aston Martin Lagonda’s ability to produce sufficient cars to meet demand. This would materially

reduce Aston Martin Lagonda’s revenues and would require significant investment.

There are risks associated with the ramping up and testing of the plant in St. Athan for full

production. For instance, if the St. Athan manufacturing facility is not ready for full production

on time, the Group may be unable to achieve the expected delivery capacity of its manufacturing

facilities to ensure the optimal balance between supply and demand. Therefore the project may

require additional development efforts to meet this pre-determined deadline and this may result

in significant additional costs or delivery capacity of less than the targeted volumes. An

unanticipated increase in costs relating to ramping up and testing the plant for full production or

lower than expected delivery volumes may result in reduced liquidity available for investments in

car and powertrain design, engineering and manufacturing and other capital expenditure

necessary to maintain the Group’s schedule of product refreshment and enhancement. In

addition, there may be a delay to the targeted time for the plant in St. Athan to become

operational and commence the manufacturing of cars.

Aston Martin Lagonda’s future success depends on its ability to continue to sell its cars to

customers at prices which reflect the cost of maintaining the high quality of its cars.

The Group’s quality standards and the Aston Martin brand can only be maintained by incurring

costs to maintain and ensure quality. Errors or defects in parts and components procured

externally or manufactured in-house, or assembly mistakes, could prompt the Group to

implement servicing or recall campaigns for cars manufactured and delivered, or even to develop

new technical solutions, each of which has happened to the Group in the past. Such measures

may require significant time and financial resources, which in turn may lead to higher provisions

for warranties and expenses over and above the levels of existing provisions.

There is no guarantee that Aston Martin Lagonda will continue to be able to sell its cars to

customers at prices that are appropriate for the high quality of its products. Pricing pressure

could limit Aston Martin Lagonda’s ability to pass on production costs to its customers. These

pricing pressures could also exert additional price pressures on Aston Martin Lagonda’s suppliers,

which in turn may have a negative effect on product quality and damage Aston Martin

Lagonda’s reputation or reduce demand for its products.

The Group may from time to time choose to support the profitable sale of new Aston Martin cars

through its franchised dealer network. This is known as “marketing support”. The mechanism of

support varies according to the local market needs and customs in order to achieve optimum

value from such contributions. In 2019, the Group started the year with elevated levels of

company and dealer stocks and utilised marketing support to incentivise retail sales to start to

de-stock the network. Whilst dealer stocks at 31 December 2019 were approximately 190 units

lower than they were at 31 December 2018, they remain elevated and the Group is focused on

repairing the balance between demand and supply, to allow the Group to regain its price

positioning. If retail sales decline, it could take longer than expected to achieve this rebalancing,

and wholesale volumes could decline more than expected. A reduction in marketing support

could lead to a decreased level of retail sales.

Demand for Aston Martin Lagonda’s products and its pricing power is dependent on consumers’

sentiment and purchasing power.

Demand for cars relies on consumers’ purchasing power and consumer confidence regarding

future economic developments. Consumer demand is negatively affected by a decrease in

potential customers’ disposable income, assets or financial flexibility or uncertainty as to their

future income, assets or financial flexibility. In particular, consumers may refrain from purchasing

a new car and instead purchase a used car, defer a future purchase or purchase a lower-priced

brand. In addition, even where potential customers have sufficient purchasing power and

confidence, demand for Aston Martin Lagonda’s cars may be affected by consumer sentiment.

When economic conditions are poor, unemployment levels are high and incomes are under

pressure, consumers may not want to be seen owning or driving an expensive car. Similarly,

increasing awareness of environmental issues, in particular pollution levels, may reduce demand

for the Group’s sports cars since they produce more emissions than the average car.

Aston Martin Lagonda’s products are priced and positioned in the high luxury sports (HLS) car

segment, which is at the top-end of the car market and, as a result, Aston Martin Lagonda’s

customers require considerably higher than average levels of income or assets to be in a position

to afford its products. This makes Aston Martin Lagonda’s car sales dependent on the number of

high net worth individuals (HNWIs) in the world, and its growth strategy dependent on the

growth in the number of those individuals. The number of HNWIs in the world has increased over

the last decade, but there can be no assurance that this trend will continue or that it will not

reverse. Factors that could halt or reverse this trend include deteriorating global economic or

political conditions, changes in tax laws, government intervention in particular industries, such as

banking, and on remuneration levels within those industries.

Pricing pressure could result from declines in absolute demand for Aston Martin Lagonda’s

products, which could arise as a result of economic conditions or due to higher demand for cars

produced by other manufacturers or consumer backlash against high prices, as well as increased

dealer incentives, including margins on sales, potentially driven by other manufacturers.

In addition, Aston Martin Lagonda’s reliance on key markets increases the risk of adverse change

in customer demand in those regions. For example, Aston Martin Lagonda has a significant

presence in the United States, the United Kingdom and Europe, which together accounted for

81 per cent., 78 per cent. and 78 per cent., respectively, of its unit sales in 2017, 2018 and 2019.

As the Group’s business is highly dependent on these key markets, a decrease in customer

demand in these markets could have a negative impact on the Group’s operations. For example,

the Group’s wholesales in the United Kingdom and EMEA segments have softened by 21 per

cent. and 28 per cent., respectively, in 2019 compared to 2018, and continued softening of those

key markets may affect the Group’s results of operations.

Aston Martin Lagonda is dependent upon its dealers for the sale and promotion of products and

services.

Aston Martin Lagonda is almost entirely dependent upon third-party dealers for the sale and

promotion of its products and services. These dealers may exert pressure on the level of Aston

Martin Lagonda’s dealer margins and incentives, thus eroding Aston Martin Lagonda’s

profitability. They may also encounter financial difficulties that could restrict them from selling

Aston Martin Lagonda’s products or services, and/or require Aston Martin Lagonda to provide

support or investment leading to increased costs. In addition, if financial difficulties affect a

significant number of dealers in a region, Aston Martin Lagonda’s sales in that region as a whole,

and its brand visibility, could be adversely affected or require Aston Martin Lagonda to incur

significant investment to seek out new dealers in that region. This risk is more acute in regions

with only a single Aston Martin dealer.

Aston Martin Lagonda’s growth strategy is also dependent on a sufficient number of new Aston

Martin Lagonda dealers opening to sell its products or services in new areas and jurisdictions. In

particular, Aston Martin Lagonda may face competition from other HLS car manufacturers for

potential new dealer openings, based on, among other things, dealer margin, incentives and the

performance of other Aston Martin Lagonda dealers in the relevant jurisdiction. If insufficient

new Aston Martin Lagonda dealers open in new areas and jurisdictions, Aston Martin Lagonda’s

growth prospects could be materially adversely affected.

Many of the Group’s dealers are owned by dealer groups which could spread the impact of the

above factors across more than one dealership.

Further, Aston Martin Lagonda is exposed to the risk that its compliance controls and procedures

may not, in every instance, protect it from acts committed by such dealers that could violate the

Group’s dealership agreements or the laws or regulations of the jurisdictions in which it operates

(including foreign corrupt practices, trade sanctions and other laws and regulations).

Car sales in certain regions depend in part on the availability of affordable financing.

In certain regions, such as the United States, United Kingdom and Europe, financing for new car

sales has been available at relatively low interest rates for several years due to, among other

things, expansive government monetary policies. To the extent that interest rates generally rise,

market rates for new car financing are expected to rise as well, which may make Aston Martin

Lagonda’s cars less affordable or cause consumers to purchase less expensive cars, thus affecting

the level of sales. Additionally, if interest rates increase substantially or if financial service

providers tighten lending standards or restrict their lending to certain classes of credit, clients

may choose not to, or may not be able to, obtain financing to purchase Aston Martin Lagonda’s

cars. Further, certain of the Group’s partnerships with financial service providers pursuant to

which they provide financing loans and leases to the Group’s customers are connected with the

Group’s ratings. As a result, in the event the Group’s ratings decline, the availability of financing

loans and leases for the Group’s customers may be reduced, and the Group’s customers may not

be able to procure sufficient financing to purchase Aston Martin Lagonda cars.

The trend toward cars with lower engine capacity and new drive technologies could negatively

affect Aston Martin Lagonda.

For several years, various markets, such as those in Europe, the United States and China, have

seen a general trend toward demand for cars that use less fuel and emit fewer emissions. This has

led to manufacturers introducing engines that have a lower capacity, while maintaining

performance levels through technological advances, as well as a trend toward hybridisation.

Factors contributing to this trend include rising fuel prices, decreasing disposable incomes and

increasing government regulation of greenhouse gas emissions and fuel efficiency.

The Group is developing a fuel-efficient, modular V6 engine with hybrid and plug-in capabilities,

which will support Aston Martin core cars being available as hybrid and plug-in hybrid variants

from the mid-2020s. However, the Group currently offers HLS cars that generally use

comparatively more fuel and produce comparatively higher levels of emissions than those in

lower car classes. Therefore, the continuation of this trend could adversely affect Aston Martin

Lagonda’s business. The Group has been developing a fully-electric car, the Rapide E. However,

following a recent operational and financial review, that programme is paused pending a review.

Further, the Group’s plans to develop fully-electric cars under the Lagonda marque have been

delayed, and the Lagonda brand will now be relaunched no earlier than 2025. These delays

heighten the risk that the Group may not develop lower capacity vehicles as quickly as its

competitors and therefore fail to develop market share in this growing segment.

The development of engines that have lower capacity and consume less fuel while maintaining

performance levels is technologically challenging and cost intensive and Aston Martin Lagonda

may not be able to pass on the cost to customers. There is a risk that competitors will develop

products that meet these objectives more rapidly, in larger quantities, with a higher quality or at

a lower cost, as incorporating new technologies into vehicle designs costs the same or more for

smaller volume manufacturers. As a smaller volume manufacturer, the costs for Aston Martin

Lagonda are spread over significantly smaller volumes than they would be for competitors within

the HLS car market that produce vehicles in larger quantities, which could lead to increased

demand for competitors’ lower-priced products and result in erosion of Aston Martin Lagonda’s

market share once it begins selling cars in this market. In addition, as use of new technology

increases within the automotive industry, customers are no longer looking for products based

solely on the current standard factors such as price, design, performance, brand image, comfort

and available features, but also consider the technology used in the car or by the manufacturer.

This could lead to shifts in demand in the automotive industry, which could in turn lead to a

lower demand for products manufactured by Aston Martin Lagonda.

The strength of the Aston Martin brand could be diluted or weakened.

The strength of the Aston Martin brand could be diluted or weakened by a failure to continue to

produce cars of appropriate performance, aesthetics and quality, failure to keep up with new

technologies, quality issues or recalls, dealers promoting other manufacturers’ cars in priority to

Aston Martin Lagonda’s and counterfeit cars and parts affecting performance and quality

perceptions. In particular, any product recall (whether voluntary or involuntary) in the future

may involve significant expense (which could have a material effect on Aston Martin Lagonda’s

financial results) and diversion of management attention and other resources, as well as result in

adverse publicity, which would damage Aston Martin Lagonda’s brand. For example, in 2017,

Aston Martin Lagonda recorded additional warranty costs following its recall campaigns of

approximately 5,500 cars in the United States due to problems with powertrains and battery

cables.

An increased availability of financing options for the Group’s products and/or an increase in the

number of cars produced by the Group could also reduce the exclusivity of the Group’s cars,

adversely impact the ability of the Group to increase prices on new products and/or weaken the

brand. In addition, publicity around the Group’s recent trading performance and the Capital

Raise could negatively impact the Group’s brand. If the strength of the Aston Martin brand is

diluted or weakened for any reason, demand for its cars may be significantly and negatively

affected and could require Aston Martin Lagonda to devote greater resources to marketing its

brand.

Aston Martin Lagonda selectively licenses the Aston Martin brand to various commercial

enterprises, has formed strategic commercial partnerships and has also engaged brand

ambassadors. There is a risk that the decisions and behaviours of such licensees, commercial

partners and brand ambassadors or any negative publicity surrounding them could lead to

reputational damage to Aston Martin Lagonda and its brand, which could lead to a decline in

demand for Aston Martin Lagonda’s products. For example, poor performance by an Aston

Martin-sponsored motorsports team could have a negative effect on the Aston Martin brand and

public perception of its cars and, in particular, special edition models such as the Aston Martin

Valkyrie.

The Group’s profitability relies in part upon its ability to produce and deliver its special edition

models. If the Group is delayed or becomes unable to deliver these models in the applicable time

frames, this could lead to additional costs, reduced profitability, return of customer deposits and

damage to the Group’s reputation.

In addition to the ongoing production of its three current core models, Aston Martin Lagonda

offers limited numbers of special edition models, such as the Vantage GT12, Vantage AMR, Aston

Martin Vulcan, DB4 GT Continuation, DB5 Continuation, Vanquish Zagato, Valkyrie, Valkyrie

AMR Pro and DBZ Centenary pair models. The Group’s profitability relies in part upon its ability

to produce and deliver these special edition models within targeted time frames. If an event

results in a delay or halt in production, such as technological failure or industrial action or if

there are production issues with a special edition model in general, this could lead to a delay in

release of a special edition model and increase costs of production.

In addition, because of their desirability, special edition models are typically fully allocated prior

to any significant capital commitment, with customer deposits due at the time of allocation. In

some cases, these are refundable at the customer’s discretion, and in all cases the Group would

be required to return the deposits in the event that the relevant special edition model were to be

cancelled, despite potentially having spent significant amounts on the project. A return of a

substantial number of customer deposits could have a significant impact on the Group’s financial

condition.

The sale of special edition models is an important source of revenue to Aston Martin Lagonda

and so failure to produce or deliver these special editions to customers could negatively affect

Aston Martin Lagonda’s profitability and damage customer relations and the brand.

Aston Martin Lagonda faces strong competition within the HLS car market, which could lead to

a saturation of the market, resulting in a significant drop in unit sales or price deterioration.

Aston Martin Lagonda competes with a number of other manufacturers with strong brands and

reputations, such as Ferrari, McLaren, Rolls-Royce, Lamborghini and Bentley (many of which have

greater financial resources than the Group, often as a result of their being owned by or

associated with mass car manufacturers). For example, Bentley (Bentayga), Rolls-Royce (Cullinan)

and Lamborghini (Urus) have all introduced an SUV model in the high end SUV market in recent

years. The HLS car market, and in particular the SUV segment thereof, is relatively small, due to

the price at which the cars are sold and the significant investment required to introduce new

models to the market. The HLS car market could potentially become saturated and unable to

support the growing levels of production and competition.

If there is insufficient demand to support the increasing volumes and levels of competition, or if

Aston Martin Lagonda is unable to continue to produce cars that are, or that consumers and

industry commentators consider to be, competitive, this could result in a drop in unit sales of

Aston Martin Lagonda or pricing pressure.

In addition, the alternative fuel vehicle market is highly competitive and Aston Martin Lagonda’s

ability to compete successfully in this market in the longer-term will depend on, in part, its ability

to keep pace with changes in electric vehicle technology. Further, changes in regulation or

environmental policy could impact vehicle pricing, and the Group may not be able to compete

effectively with its competitors, which could have a material adverse effect on the Group’s

business, financial condition and results of operations.

The Group may not be able to realise cost savings, reduce capital expenditure or balance supply

and demand effectively in line with its strategy.

In 2019, the Group experienced difficult trading and significant liquidity constraints. As a result,

the Group undertook an operational and financial review to address these issues. This concluded

with the Board agreeing a series of actions to reset, stabilise and de-risk the business and

position the Group for controlled, long-term, profitable growth. The resetting of the Second

Century Plan includes the Capital Raise of £500 million, the rebalancing of supply and demand

dynamics, reduced capital expenditure and the re-phasing of some future product launches,

together with cost-efficiency initiatives.

Aston Martin Lagonda’s ability to successfully implement its strategy will depend on, at least in

part, its ability to reduce costs without diminishing the quality of its cars, as well as to reduce

capital expenditures without limiting its ability to introduce new cars in line with changes in

trends and advances in technology. Market conditions and customer trends change over time and

may be particularly affected by macroeconomic factors, which may provide challenges to the

Board’s ability to implement its business plan or require it to re-consider it or adopt new

strategies. An inability to achieve these goals, or to achieve them only in part or later than

expected, could result in increased costs, damage to the Aston Martin brand, decreased sales,

elevated levels of company or dealer stocks and/or liquidity constraints, any of which could have

a material adverse effect on the Group’s business, financial condition and results of operations.

Further, the Group considers that a key appeal of the Aston Martin brand is the aura of

exclusivity and the sense of luxury that the brand conveys. A central facet to this exclusivity is the

limited number of models and cars produced. However, this low-volume strategy may limit the

Group’s potential sales growth and profitability. In addition, the Group’s strategy seeks to

manage production volumes to maintain new car supply below market demand. An inability to

balance supply and demand effectively may result in excess inventory. For example, in 2019 the

Group started the year with elevated levels of company and dealer stocks. Consequently,

achieving the retail sell through to start to de-stock the network required more retail and

customer financing support than planned, which weighed on average selling price.

Managing the above risks requires the Group to be agile and, if necessary, the Board may

determine that it is appropriate to adapt its strategy and business plan in the future. Inability to

manage these risks and remain agile could harm the Group’s growth prospects and may have a

material adverse effect on its business, financial condition and results of operations.

The Group’s growth strategy of expanding its geographical footprint could expose the business

to new risks.

Aston Martin Lagonda’s growth strategy of expanding its geographical footprint could expose

the business to new risks that it may not have the expertise, capability or the systems to manage.

These risks include cultural differences, difficulties in staffing and managing overseas operations,

inherent difficulties and delays in contract enforcement and the collection of receivables under

the legal systems of foreign countries, the risk of non-tariff barriers, regulatory and legal

requirements affecting Aston Martin Lagonda’s ability to enter new markets (including

requirements for joint ventures with local entities), difficulties in obtaining regulatory approvals,

environmental permits and other similar types of governmental consents, difficulties in

negotiating effective contracts, obtaining the necessary facility sites or marketing outlets or

securing essential local financing, liquidity, trade financing or cash management facilities, export

and import restrictions, multiple tax regimes (including regulations relating to transfer pricing

and withholding and other taxes on remittances and other payments from subsidiaries) and

restrictions on repatriation of funds, other restrictions on foreign trade or investment sanctions,

and the burdens of complying with a wide variety of foreign laws and regulations. Any of the

foregoing may have a material adverse effect on the Group’s business, financial condition and

results of operations.

Aston Martin Lagonda’s business is affected by the timing of new product launches, as well as

other seasonal factors.

Sales in the automotive industry are affected by the timing of new product launches throughout

the year, and to a lesser extent by traditional selling seasons, which are typically higher in the

second and fourth quarters of each financial year (where consumer activities are less affected by

weather and vacation periods). This means that cash flows have been cyclical in the past and this

cyclicality is likely to continue. The resulting sales profile influences operating results on a

quarter-by-quarter basis. If sales during Aston Martin Lagonda’s peak periods, particularly the

autumn when new models are typically introduced, are significantly lower than expected, Aston

Martin Lagonda may be unable to recover its expenses in time to react to reduced levels of sales.

As a result, Aston Martin Lagonda may experience a corresponding fluctuation in cash flow

levels. This occurred in the fourth quarter of 2019, where challenging trading performance

continued through the peak delivery period of December resulting in lower sales, higher selling

costs and lower margins.

Daimler is one of the Group’s significant suppliers and also holds Shares in the Company.

Aston Martin Lagonda sources certain engines, electrical architecture and entertainment systems

exclusively from Daimler, which in 2019 was the Group’s largest supplier by spend. Aston Martin

Lagonda’s reliance on Daimler means that it is exposed to the risk that Daimler becomes unable

or unwilling to produce and supply engines, electrical architecture or entertainment systems or

that the quality and performance of those products declines, for any reason (including favouring

other purchasers due to better pricing or volume, financial difficulties, damage to production,

transportation difficulties, labour disruption, supply bottlenecks of raw materials and

pre-products, natural disasters, war, terrorism or political unrest). If the quality or performance of

the engines, electrical architecture or entertainment systems declines, demand for Aston Martin

Lagonda’s products may be adversely affected, particularly since engine performance is a key

factor in sports car desirability.

Although the primary supply agreements with Daimler are long-term arrangements and can only

be terminated by Daimler due to insolvency, material breach and in certain other circumstances

described below, if Aston Martin Lagonda is unable to continue obtaining engines, electrical

architecture and entertainment systems from Daimler, it would need to seek alternative

suppliers, or expand its manufacturing operations to build such products itself, which would take

time and require significant capital expenditure. This could restrict or delay Aston Martin

Lagonda’s ability to produce new cars and materially reduce its profitability. In addition, either of

these alternatives could increase the cost of the Group’s engines, electrical architecture and

entertainment systems compared with the prices that Aston Martin Lagonda currently pays or

affect the quality and performance of its cars.

The various agreements governing the supplier relationship between Daimler and Aston Martin

Lagonda impose certain restrictions that have the effect of limiting the Group’s ability to obtain

investment from certain strategic Daimler competitors, or certain other restricted parties,

without Daimler’s consent. If certain strategic Daimler competitors acquire any interest or certain

other restricted parties acquire a specified interest in the Company without Daimler’s consent,

either Aston Martin Lagonda or Daimler may give notice of at least three years that the principal

operational agreements governing the commercial and supply arrangements between Daimler

and the Group will terminate. Moreover, the fact that Daimler is a Shareholder of the Company

might impact the willingness of other potential suppliers to provide goods to the Group.

The Group could experience significant disruption to its production capabilities as a result of its

dependence on a limited number of key suppliers.

The V12 engines used in certain of Aston Martin Lagonda’s cars are assembled by Ford under an

engine supply contract which currently runs to the end of 2021. In December 2018, the Group

gave 36 months’ notice to Ford that it does not intend to extend the contract. At present, Ford is

the Group’s only supplier of V12 engines, and the Group’s reliance on Ford means that it is

exposed to the risk that Ford becomes unable or unwilling to assemble V12 engines, for any

reason for the remaining duration of the Group’s contract with them. This could restrict or delay

the Group’s ability to produce cars using V12 engines, increase the cost of the Group’s engines

and materially reduce its profitability if the Group is unable to develop a cost effective and

timely alternative. The Group has entered into a contract with a new supplier, pursuant to which

V12 engines will be assembled and supplied for the Group from June 2021. This agreement,

similar to the Ford contract, is subject to a three-year notice of termination. The Group is also

negotiating with this supplier in relation to the supply of V6 engines.

In addition, Aston Martin Lagonda relies on a limited number of suppliers for certain raw

materials and components used in its cars. Due to the low volumes of orders (as well as for

quality assurance, cost effectiveness and availability), Aston Martin Lagonda procures certain raw

materials and components from sole and limited source suppliers and does not typically maintain

significant inventories of such raw materials and components. For example, Aston Martin

Lagonda sources the majority of the leather used in its cars from a sole supplier. Additionally,

Aston Martin Lagonda uses materials such as carbon fibre, and will use rare minerals in the

future as part of its electric vehicle strategy, for which there are limited suppliers. Aston Martin

Lagonda’s dependence on a limited number of suppliers exposes it to the risk of suppliers

becoming more expensive due to supplier pricing power, limited availability and delivery

schedules and the risk of the quality of the products produced by that supplier declining. If one

or more of Aston Martin Lagonda’s suppliers becomes unable or unwilling to fulfil its delivery

obligations, or is unable to supply products of the requisite quality for any reason (including

favouring other purchasers due to better pricing or volume, financial difficulties, damage to

production, transportation difficulties, labour disruption, supply bottlenecks of raw materials and

pre-products, natural disasters, war, terrorism or political unrest), there is a risk that Aston Martin

Lagonda’s ability to produce vehicles or the quality of its vehicles could be negatively affected,

which could adversely affect demand for Aston Martin Lagonda’s vehicles.

As part of the Group’s growth strategy, Aston Martin Lagonda will need to engage additional

suppliers and to increase demand from existing suppliers for raw materials and components (as a

result of both increasing volumes and expansion into new categories and technologies). This

exposes the Group to the risk that it is unable to source the required level of materials and

components, which could restrict or delay the Group’s ability to produce the planned level of cars

and to deliver its growth strategy.

Further, Aston Martin Lagonda is exposed to the risk that its compliance controls and procedures

may not, in every instance, protect it from acts committed by such suppliers that could violate the

laws or regulations of the jurisdictions in which it operates (including foreign corrupt practices,

trade sanctions and other laws and regulations).

Aston Martin Lagonda’s long-term success depends on attracting and retaining management

and other personnel, as well as on maintaining good relations with its workforce.

Aston Martin Lagonda’s future success depends substantially on the service and performance of

the members of its senior management team for the running of its daily operations as well as for

the planning and execution of its strategy. Aston Martin Lagonda is also dependent on its ability

to retain and replace its design, engineering and technical personnel so that it is able to continue

to produce cars that are competitive in terms of performance, quality and aesthetics. There is

strong competition worldwide for experienced senior management and personnel with technical

and industry expertise. If Aston Martin Lagonda loses the services of its senior management or

other key personnel, it may have difficulty and incur additional costs in replacing them. If Aston

Martin Lagonda is unable to find suitable replacements in a timely manner, its ability to realise

its strategic objectives could be impaired. In addition, Aston Martin Lagonda’s ability to realise its

strategic objectives could be impaired if it is unable to recruit sufficient numbers of new

personnel of the right calibre to support these objectives.

The labour-intensive nature of Aston Martin Lagonda’s business requires an adequate supply of

qualified, skilled production workers necessary to maintain the high manufacturing standards

required for Aston Martin Lagonda’s products. Increased employment competition for skilled

individuals from other manufacturers, the inability to hire or retain these skilled employees

(including, due to the effects of Brexit) or increased labour costs generally could have a material

adverse effect on Aston Martin Lagonda’s ability to control expenses and efficiently conduct its

operations.

If production or other areas of Aston Martin Lagonda’s business are compromised by prolonged

industrial action, Aston Martin Lagonda’s performance and profitability could be materially

adversely affected. Competitors may also obtain competitive advantages if they succeed in

negotiating collective wage agreements on better terms and conditions than Aston Martin

Lagonda has. Foreign competitors, in particular, may also obtain competitive advantages due to

more flexible labour laws.

Legal, political and economic uncertainty surrounding the exit of the United Kingdom from the

European Union (Brexit) may be a source of instability in international markets, create

significant currency fluctuations, and adversely affect current trading and supply arrangements.

Whilst the United Kingdom officially exited the European Union on 31 January 2020, the

pre-31 January 2020 legal status quo is continuing during a so-called “transition period” during

which the United Kingdom and the European Union are continuing to negotiate the terms of the

separation and any future trade deal. This transition period is currently due to last until the end

of December 2020, and the parties may agree to extend it. Ongoing uncertainty on whether and

when the United Kingdom and the European Union will come to an agreement on the terms of

the separation and/or any subsequent trade deal sustains the possibility that the United Kingdom

will leave the European Union without an ongoing agreement and/or transition plan in place.

Due to the size and importance of the UK economy, the uncertainty and unpredictability

concerning the United Kingdom’s ongoing legal, political and economic relationship with the

European Union may continue to be a source of instability in the international markets, create

significant currency fluctuations, and/or otherwise adversely affect trading agreements or similar

cross-border cooperation arrangements (whether economic, tax, fiscal, legal, regulatory or

otherwise) for the foreseeable future.

The long-term effects of Brexit will depend on any agreements (or lack thereof) between the

United Kingdom and the European Union and, in particular, any arrangements for the United

Kingdom to retain access to EU markets. The Group is based in the United Kingdom and in 2019

sold 15 per cent. of its cars in EU member states outside the United Kingdom, so any negative

effect on the Group’s ability to continue selling cars in EU member states and the terms on which

the Group make such sales, including the imposition of import duties as a result of cessation of

existing free trade agreements or potential value-added tax (VAT) cash flow costs at the new UK

trade border, could have a significant adverse effect on the Group’s sales and profitability.

Additionally, the rate of exchange of the pound sterling vis-à-vis other currencies has dropped

significantly since the Brexit referendum, which results in increasing costs of non-sterling

denominated auto-parts (including the engines purchased in euro from Daimler and Ford) and

other raw materials, as well as other obligations. Similarly, a majority of the Group’s suppliers are

located in EU member states and so fiscal or other restrictions on the free movement of goods

(including as a result of customs duties, import tariffs or other restrictions on trade), or

termination provisions in the Group’s supply agreement with them, could also have a material

adverse effect on the Group’s supply chain and, consequently, on its production schedule and

costs and the Group may not be able to sell its cars to customers at prices which reflect such

increased costs which could negatively impact the Group’s margins and profitability.

Following the end of the transition period, there are likely to be changes in the legal rights and

obligations of commercial parties across all industries. Given the high correlation in luxury

markets between demand and the wealth, economic growth and stability in the markets

generating that demand, there is a risk that Brexit, other political developments or developments

otherwise affecting market confidence could negatively affect consumer behaviour and,

consequently, the volume of sales and demand for the Group’s cars.

In addition, a portion of the Group’s engineers and factory workers are from other European

countries and there is a risk that Brexit will affect the Group’s ability to retain and recruit skilled

workers from this wider European labour market.

Changes in laws and regulations, including export, tax and employment laws and regulations,

could adversely impact the Group’s ability to continue manufacturing its cars in the United

Kingdom. The Group’s plants in the United Kingdom use “just in time” manufacturing methods,

where parts arrive at sites shortly before they are needed on assembly lines, and disruptions to

the Group’s supply chain as a result of Brexit or other UK or EU export controls could cause

business interruptions in the Group’s UK plants or require higher but less efficient inventory

levels. Increased inventory levels have had, and are expected to continue to have, an adverse

impact on the Group’s cash flow levels and working capital. In connection with Brexit, the Group

recruited a Chief of Purchasing and Supply Chain Officer during 2018 and the Group has tested

plans to mitigate potential negative impacts of Brexit on the Group’s supply chain. However, the

Group cannot guarantee that these plans will be sufficient and, to the extent its plans are

insufficient, Brexit could have a material effect on the Group’s business, cash flows, financial

condition and results of operations.

Furthermore, the UK regulatory requirements following the transition period could be subject to

significant change and could place additional burdens on manufacturers selling their products in

the United Kingdom, which could affect the Group’s financial performance, as the UK market is

significant to the Group (representing £229.6 million, or 23.0 per cent., of the Group’s revenues

in 2019).

New laws, regulations or policies of governmental organisations regarding increased fuel

economy requirements, reduced greenhouse gas or pollutant emissions or vehicle safety could

give rise to significant costs.

Aston Martin Lagonda is subject to comprehensive and constantly evolving laws, regulations and

policies related to environmental matters (and, in particular, climate change) and health and

safety throughout the world. Capital and operating expenses required in order to comply with

environmental laws and regulations can be significant, and violations may result in substantial

fines and penalties, third-party damages, suspension of production or a cessation of Aston Martin

Lagonda’s operations. The Company anticipates that the extent of the legal and regulatory

requirements in these areas and the related effect on Aston Martin Lagonda’s operations and

costs of compliance will continue to increase in the future.

In general, there is a clear move toward increasingly stringent vehicle emissions regulations,

particularly for conventional drive systems, not only in the developed markets of Europe and

North America, but also in emerging markets such as China. Moreover, further tightening and

scrutiny could be forthcoming given the ongoing focus on emissions testing and on-road

performance, which could lead to significant additional investments to comply with new

regulations as well as risks of limited market availability of products. As a small-volume

manufacturer, the Group is able to rely on certain exemptions and/or alternative standards in

some of its markets. The Group would be subject to more stringent standards and increased costs

if it were to lose its status as a small-volume manufacturer in any of its markets (either because

the requirements for such status change or otherwise) or the required standards under any

applicable regimes were to change.

While Aston Martin Lagonda is managing its product development and production operations on

a global basis to reduce costs and lead times, unique national or regional standards can result in

additional costs for product development, testing and manufacturing. Governments often

require the implementation of new requirements during the middle of a product cycle, which can

be substantially more expensive than accommodating these requirements during the design of a

new product. The imposition of any additional taxes and levies or changes in government policies

designed to limit the use of high-emission vehicles, such as high performance sports cars or

automobiles more generally, could also adversely affect the demand for Aston Martin Lagonda’s

cars and results of its operations.

Violations of existing or future laws and regulations may occur, among other ways, from errors in

monitoring emissions from products or production sites into the environment, such as the use of

incorrect methodologies or defective or inappropriate measuring equipment, errors in manually

capturing results or other mistaken or unauthorised acts of Aston Martin Lagonda’s employees,

suppliers or agents. As a result of the current and any future emissions requirements, Aston

Martin Lagonda may be required to apply for exemptions for small-scale producers, pay

penalties, make significant investments, alter its product line-up or be unable to sell its products

in certain jurisdictions. In addition, to comply with current and future environmental, health and

safety norms (such as air emissions, the maintenance of safe workplace conditions and

regulations that impose responsibility on vehicle manufacturers to fund the recovery, recycling

and disposal of vehicle parts, including lead-acid batteries, at the end of their useful life), Aston

Martin Lagonda may have to incur substantial capital expenditure and research and development

expenditure to upgrade products and manufacturing facilities. All of these factors could increase

Aston Martin Lagonda’s costs significantly.

Conditions in the global economy may adversely affect Aston Martin Lagonda.

The Group operates in the HLS car market and accordingly its performance is linked to market

conditions and consumer demand in that market. Sales of HLS cars are affected by general

economic conditions and can be materially affected by the economic cycle. Demand for luxury

goods, including HLS cars, is inherently volatile and depends to a large extent on the general

economic, political and social conditions in a given market. Furthermore, economic slowdowns in

the past have significantly affected the automotive and related markets. Periods of deteriorating

general economic conditions may result in a significant reduction in HLS car sales, which may

negatively affect Aston Martin Lagonda’s profitability and put downward pressure on its product

and service prices and volumes. These effects may have a more pronounced effect on Aston

Martin Lagonda’s business, due to the relatively small scale of its operations and its limited

product range.

The effect of adverse economic conditions could also be exacerbated by Aston Martin Lagonda’s

dealer network taking steps to improve their financial condition in the face of decreasing overall

demand, including the sale of floor and demonstration models by dealers at prices below the

retail price of Aston Martin Lagonda’s cars, fewer purchases of demonstration and floor models

by dealers and dealers reducing prices of pre-owned Aston Martin cars. All of these actions taken

by dealers may reduce demand for the Group’s new cars.

Declines in demand associated with economic conditions may require cutbacks in production,

reduced working hours and redundancies to reduce Aston Martin Lagonda’s cost base.

Redundancies may increase costs in the short term and may also lead to capacity constraints

when demand recovers. Other measures taken to reduce production levels, such as factory or

assembly line closures and reduced working hours, may also lead to capacity constraints when

demand recovers. Inability to meet demand during an economic recovery could weaken Aston

Martin Lagonda’s relative market position as compared with its competitors and reduce potential

revenues and profits.

Downturns in general economic conditions may also materially affect Aston Martin Lagonda’s

suppliers. Adverse economic conditions may cause suppliers to be unable to meet their

commitments to the Group, which could limit Aston Martin Lagonda’s ability to produce

sufficient numbers of cars to meet demand, or its ability to produce any cars at all. Aston Martin

Lagonda’s suppliers may also seek to reduce their costs in response to adverse economic

conditions, which could reduce the quality of their products, which, in turn, could damage Aston

Martin Lagonda’s reputation. Suppliers may also seek to make changes in the credit terms they

extend to the Group, or request the Group to keep sufficient liquidity, each of which could affect

Aston Martin Lagonda’s liquidity position.

The coronavirus health emergency could have a material adverse effect on the Group’s retail

sales and supply chain.

The recent outbreak of COVID-19 (commonly referred to as coronavirus) has negatively impacted

economic conditions in China and potentially regionally and globally. The Group expects this to

negatively affect its retail sales, in particular in China. In addition, if the coronavirus outbreak

continues and results in a prolonged period of travel, commercial and other similar restrictions,

the Group could experience global supply disruptions. If such supply disruptions were to occur,

the Group may not be able to develop alternate sourcing quickly. Any disruption of the Group’s

production schedule caused by an unexpected shortage of systems, components, raw materials or

parts even for a relatively short period of time could cause the Group to alter production

schedules or suspend production entirely, which could cause a loss of revenues, which could

materially adversely affect the Group’s business, cash flows, financial condition and results of

operations.

Aston Martin Lagonda faces credit and market risks arising from foreign currency exchange

rates, commodity prices, interest rates and related hedging activities.

Aston Martin Lagonda is exposed to risks in respect of changing market prices, such as foreign

currency exchange rates, commodity prices and interest rates. Aston Martin Lagonda operates

globally and generates a significant portion of its revenue in currencies other than pound

sterling, including in particular the US dollar and the euro. Uncertainty concerning the terms of

Brexit could cause greater volatility in the pound sterling against foreign currencies in which the

Group conducts business and heighten the Group’s translation risk. An unfavourable exchange

rate trend could affect operating results as well as the Group’s financial condition and cash flow.

A portion of the Group’s costs are denominated in a variety of currencies, in particular the euro,

which is the currency in which the Group purchases engines from Daimler and Ford. In addition,

56 per cent. of the Group’s gross debt was denominated in US dollars as at 31 December 2019.

Since the Brexit referendum, the exchange rate of the pound sterling vis-à-vis other currencies

has dropped significantly, which has resulted, and may continue to result in, increasing costs of

non-sterling denominated auto-parts and other raw materials, as well as finance costs and other

obligations. If all other variables were held constant and assuming that none of the US dollar

exposures are hedged, if the US dollar to pound sterling exchange rate were to decrease by five

per cent., the effect on the Group’s loss after tax in 2019 would have been a reduction of

£8.6 million.

Aston Martin Lagonda seeks to manage currency risk through hedging where possible; however,

there are risks associated with the use of such instruments. While limiting to some degree Aston

Martin Lagonda’s risk from fluctuations in currency exchange by utilising hedging instruments

(including the use of derivative financial instruments), such hedging activities may be ineffective

or may not offset more than a portion of the adverse financial effect resulting from variations to

such rates. Aston Martin Lagonda is also exposed to counterparty credit (or repayment) risk in

respect of counterparties to hedging contracts.

Exposure to domestic and global political developments could negatively affect the Group.

Political change has the potential to directly affect Aston Martin Lagonda through the

introduction of new laws (including tax and environmental laws) or regulations or indirectly by

altering customer sentiment.

Aston Martin Lagonda may also be affected by geopolitical events, including instability within

the Eurozone, a second independence referendum in Scotland, uncertainty as to the global effect

of the current US administration, strained relations with North Korea and Russia, tensions in the

South China Sea, tensions in Iran and the Middle East as well as any widespread increases in

protectionism and global tariffs. For example, the announcement of unilateral tariffs on

imported products by the United States has triggered retaliatory actions from certain foreign

governments and may trigger retaliatory actions by other foreign governments, potentially

resulting in a “trade war”. A “trade war” of this nature or other governmental action related to

tariffs or international trade agreements, the impact of which cannot yet be fully assessed, could

negatively affect the economics of the end-markets in which the Group operates (such as the

United States and China), including regional or global demand for automobiles and automobile-

components, and the Group’s customers’ ability to purchase its cars.

In addition, in a report submitted to the US president on 17 February 2019, the US Department of

Commerce recommended a potential 25 per cent. tariff on automobiles and auto-parts imported

into the United States. Following the expiration of the subsequent 90-day decision period, the US

president has announced multiple delays to the imposition of such additional tariffs, and it

remains uncertain whether the US government will indeed impose a 25 per cent. tariff on

automobiles and auto-parts in the near term. Should such tariffs or similar trade barriers be

imposed by the US government, this would negatively impact the Group’s business in the United

States. Moreover, any countermeasures by regional or global trading partners, including the

European Union and China, could slow down global economic growth and decrease global

demand for automobiles and automobile-components.

Additional developments may also occur that Aston Martin Lagonda cannot currently know

about or anticipate, or that may be impossible to plan for or protect against. It is possible that

the effects of such geopolitical events will include further financial instability and slower

economic growth, significant regulatory changes, currency fluctuations and higher

unemployment and inflation in the United Kingdom, continental Europe and the global

economy, at least in the short to medium term. It could also create constraints on the ability of

Aston Martin Lagonda to operate efficiently in the future political environment.

Developments in emerging markets may adversely affect Aston Martin Lagonda’s business.

Aston Martin Lagonda operates in a number of emerging markets, both directly and through its

dealers, including in Asia Pacific and the Middle East.

Aston Martin Lagonda’s strategy contemplates expanding its sales in Asia Pacific and the Middle

East regions, recognising the increasing number of HNWIs in these markets. While demand in

these markets has increased in recent years, due to sustained economic growth and growth in

personal income and wealth, the extent to which economic growth in these emerging markets

will be sustained is unknown. Potential slowdowns in the rate of growth in these and in other

emerging markets, rising geopolitical tensions and changes in export, import and tariff policies

could limit the opportunity for Aston Martin Lagonda to increase unit sales and revenues in those

regions in the near term.

For example, the announcement of unilateral tariffs on imported products by the United States

has triggered retaliatory actions from certain foreign governments and may trigger retaliatory

actions by other foreign governments, potentially resulting in a “trade war” which could

negatively affect the economics of the end-markets in which the Group operates (such as the

United States and China), including regional or global demand for automobiles and automobile-

components, and the Group’s customers’ ability to purchase its cars. See also “—Exposure to

domestic and global political developments could negatively affect the Group.”

Aston Martin Lagonda’s exposure to emerging markets is likely to increase as it pursues

expanded sales in such markets. Economic and political developments in emerging markets,

including economic crises or political instability, could affect Aston Martin Lagonda. Further, in

certain markets in which Aston Martin Lagonda or its dealers operate, the requirement for

government approvals may limit the ability to act quickly in making decisions regarding Aston

Martin Lagonda’s operations in those markets. Other government actions may also affect the

market for luxury goods in these markets, such as legislative or tax changes. For example,

legislation is changing rapidly in some of these regions and the introduction of new legislation

might be unexpectedly accelerated, meaning that Aston Martin Lagonda is not able to

implement the necessary steps to be compliant by the time such changes take effect. Some

jurisdictions, such as China, also present an increased risk in this regard, due to the lack of

predictability and visibility in respect of new legislation and regulation, meaning that, in an

extreme scenario, Aston Martin Lagonda could be prevented from selling cars in a particular

region following an unexpected and significant change in the legal or regulatory position.

Maintaining and strengthening Aston Martin Lagonda’s position in these emerging markets is a

key component of Aston Martin Lagonda’s global growth strategy. However, initiatives from

several global luxury automotive manufacturers have increased competitive pressures for luxury

cars in several emerging markets. As these markets continue to grow, there is a risk that

additional competitors, both international and domestic, will seek to enter these markets and

that existing market participants will try aggressively to protect or increase their market share.

Increased competition may result in pricing pressures, reduced margins and Aston Martin

Lagonda’s inability to gain or maintain market share.

AML Limited operates an underfunded UK defined benefit pension scheme to which it is

required to make contributions and to which future additional contributions may be required as

a result of the regular triennial actuarial valuations.

The Group provides retirement benefits to certain of its current and former employees through a

number of pension arrangements. These include a UK defined benefit pension scheme (the UK

DB Plan) operated by Aston Martin Lagonda Limited (AML Limited). The UK DB Plan closed to

new entrants on 31 May 2011 but remains open to future benefit accrual for existing active

members. As at 31 December 2019, there were 515 active members in the UK DB Plan. The UK DB

Plan ceased final salary accrual from 31 December 2017 and adopted a career average revalued

earnings (CARE) benefit structure from 1 January 2018, breaking the link to final salary as at

31 December 2017. Active members’ benefits accrued prior to 1 January 2018 instead receive

increases in line with CPI (capped at 2.5 or 5 per cent. depending on the date of benefit accrual)

for each whole year between 1 January 2018 and the date the member’s benefits become

payable.

The latest actuarial valuation of the UK DB Plan as at 6 April 2017 showed a deficit of

£48.6 million on a scheme-specific funding basis. AML Limited agreed a deficit recovery plan with

the trustee of the UK DB Plan under which it is required to make contributions to the plan. Under

the recovery plan dated 5 July 2018 agreed as part of the 2017 actuarial valuation, AML Limited

agreed (i) to increase the recovery plan contributions from £2.8 million per year to £4.0 million

per year until 31 March 2020 and to £7.1 million per year thereafter through to 31 July 2025 and

(ii) to share upside performance of the business with the UK DB Plan by making additional

payments against the deficit recovery plan equal to 5 per cent. of AML Limited’s variable profits

which exceed the anticipated variable profit target agreed as part of the plan’s 2014 valuation,

but capped at £1.75 million per annum in respect of the calendar years 2018 and 2019 and then

at £3 million per annum thereafter.

The deficit of the UK DB Plan is dependent on the market value of the assets of that plan and on

the value placed on its liabilities. If the market value of the assets declines or the value of the

liabilities increases, as at the date of an actuarial funding valuation of the UK DB Plan, AML

Limited may be required to increase its contributions to the UK DB Plan. A variety of factors,

including factors outside AML Limited’s control, may adversely affect the value of the UK DB

Plan’s assets or liabilities, including interest rates, inflation rates, investment performance and

investment strategy, exchange rates, life expectancy assumptions, actuarial data and adjustments,

regulatory changes, and the strength of the employer covenant provided to the plan by the

Group. If these or other internal and external factors were to become unfavourable, or more

unfavourable than they currently are, AML Limited’s required contributions to the UK DB Plan

and the costs and net liabilities associated with the UK DB Plan could increase substantially. The

UK DB Plan’s deficit, calculated by the actuary using the same actuarial methods to set

assumptions as used for the scheme-specific funding basis in the plan’s 2017 valuation updated to

reflect market conditions at 31 December 2019 and benefits accrued to that date, has increased

since the plan’s 2017 valuation to an estimated £60.6 million as at 31 December 2019 due to a

decline in long term real rates of return.

The UK DB Plan’s next actuarial valuation will take place with an effective date of 6 April 2020.

Discussions have already started between the Group and the trustee in relation to the next

actuarial valuation and the funding and security of the UK DB Plan more generally. As part of the

valuation there will be discussions about whether (and, if so, to what extent) contributions to the

Plan should be increased taking into account the circumstances of the Group (including the

Placing and Rights Issue).

As is the case for all formerly contracted-out defined benefit pension plans in the United

Kingdom, the liabilities of the UK DB Plan, and so the funding level, could also be impacted by a

2018 High Court decision requiring the impact of unequalised guaranteed minimum pension

benefits provided to men and women to be equalised. In addition, as with many defined benefit

pension plans in the United Kingdom, the trustee has the power under the UK DB Plan’s

governing documentation to wind-up the UK DB Plan in certain circumstances, which if exercised

could accelerate and increase funding obligations to the plan.

The Group is also discussing with the trustee whether any additional employer covenant

protection or support can be provided to the UK DB Plan as part of the 2020 actuarial valuation.

The pensions regulator in the United Kingdom (the Pensions Regulator) has the statutory power

in certain circumstances to issue contribution notices or financial support directions that, if

issued, could result in significant additional liabilities arising or an acceleration in the payment

of liabilities for the Group in relation to the UK DB Plan.

If certain statutory requirements are met, the Pensions Regulator has the power to issue

contribution notices or financial support directions to the Group and/or any connected or

associated company. These are commonly referred to as “moral hazard” powers and enable the

Pensions Regulator to take action if it considers it is reasonable to do so, including where

corporate activity has had a materially detrimental effect on the security of members’ benefits in

a pension plan. Broadly a financial support direction requires the target to put in place

arrangements for the financial support of the scheme. No element of fault is required but there

is a reasonableness test and certain other statutory tests have to be satisfied. A contribution

notice requires the target to pay a sum of money into the scheme where there has been an act or

omission, one of the main purposes of which is to avoid any ‘‘employer debt’’ becoming due or

to compromise or otherwise reduce the amount of that debt or which otherwise has a materially

detrimental impact on the likelihood of accrued scheme benefits being received.

The Pensions Regulator also has powers to set assumptions and contribution levels if AML Limited

and the trustee cannot agree the deficit or contributions following the triennial funding

valuation. In cases where the deficit and funding levels are agreed, the Pensions Regulator can

still intervene if it is not satisfied that the statutory funding plans comply with the statutory

funding regime.

Any exercise of the Pensions Regulator’s powers could result in significant additional liabilities

arising or an acceleration in the payment of liabilities for the Group.

In correspondence between the Pensions Regulator, the Trustee and the Group prior to the

announcement of the Placing and Rights Issue, the Pensions Regulator expressed concern around

the employer covenant provided to the UK DB Plan by the Group (including the impact of

secured debt taken on by the Group). The Pensions Regulator has suggested that the Group and

the trustee should consider whether additional employer covenant protection or support can be

provided to the UK DB Plan. It is expected that the trustee of the UK DB Plan will take into

account the Pension Regulator’s views in its discussions with the Group and that this will be

considered as part of the 2020 actuarial valuation taking into account the circumstances of the

Group, including the Placing and Rights Issue.

A Pension Schemes Bill has been introduced into Parliament and is expected to change the UK

regulatory framework governing defined benefit pension schemes by: (i) extending the UK

Pension Regulator’s powers in relation to its “moral hazard powers”; (ii) clarifying the scheme

funding framework; and (iii) introducing a new statutory requirement to comply with some

aspects of the UK Pension Regulator’s guidance on scheme funding, which could affect the

valuation of assets and liabilities of the UK DB Plan at its next triennial valuation. The Pension

Schemes Bill is also expected to introduce new criminal offences for “risking accrued scheme

benefits” (where a person engages in an act that they knew or ought to have known would have

a materially detrimental impact on a defined benefit pension scheme) and for “avoidance of

employer debt” (where a person acts in a way that prevents the recovery of any employer debt

which is due to a defined benefit pension scheme or otherwise compromises or settles such a

debt), in each case, without “reasonable excuse”.

Changes in tax, tariff or fiscal policies could adversely affect demand for Aston Martin Lagonda’s

products.

The imposition of any additional taxes and levies or changes in government policies designed to

limit the use of high performance sports cars or automobiles more generally could adversely

affect the demand for Aston Martin Lagonda’s vehicles and its results of operations. Changes in

corporate and other taxation policies, as well as changes in export and other incentives given by

various governments or import or tariff policies (as a result of Brexit or otherwise), could also

adversely affect Aston Martin Lagonda’s results of operations. For example, the US government’s

current administration has adopted a policy of levying tariffs on goods and materials imported

into the United States. These tariffs could have an adverse effect on Aston Martin Lagonda’s

position in the US market. See also “—Exposure to domestic and global political developments

could negatively affect the Group.”

Aston Martin Lagonda may lose or fail to maintain licences or permissions that it currently uses

to export its products into other markets.

In order to export its cars into certain jurisdictions, Aston Martin Lagonda maintains various

permits and licences from the relevant governmental bodies. To maintain these permits and

licences, Aston Martin Lagonda must meet certain standards. Any failure to satisfy such standards

or maintain or renew the relevant permits or licences or the revocation of any such permits or

licences due to regulatory changes could result in Aston Martin Lagonda’s inability to export its

products into such markets. Any loss of such a permit or licence would prevent Aston Martin

Lagonda from selling its products in such market.

Aston Martin Lagonda may not succeed in adequately protecting its intellectual property and

know-how.

Aston Martin Lagonda possesses a number of registered intellectual property rights, including

patents, registered trademarks and registered designs (Registered IP) and other industrial or

intellectual property rights (including certain confidential know-how, trade secrets, database

rights and copyrights) (together with Registered IP, IP), a number of which are of essential

importance to Aston Martin Lagonda’s business success. The grant of Registered IP and Aston

Martin Lagonda’s ownership of other IP does not necessarily mean that it is possible to enforce

any claims against third parties to the required or desired extent. Furthermore, it cannot be ruled

out that Aston Martin Lagonda’s IP could be infringed or challenged by third parties, as has

happened in the past, or that its confidential know-how or trade secrets could be

misappropriated or disclosed to the public without Aston Martin Lagonda’s consent. In such

cases, Aston Martin Lagonda may not be able to, or may be limited in its ability to, prevent such

infringements, misappropriations or disclosures, despite its ownership of IP. This applies

particularly to instances of product piracy where Aston Martin Lagonda’s components are copied,

possibly with poor quality, resulting in an additional reputation risk and warranty risk for Aston

Martin Lagonda. In addition, there is no guarantee that all applications for Registered IP filed for

or intended to be filed for by Aston Martin Lagonda for its new technologies will be issued or

granted in all countries where it believes this to be prudent. Additionally it cannot be ruled out

that, independently of Aston Martin Lagonda, third parties might develop the same or similar

know-how or trade secrets or obtain access to them.

Inadequate IP protection or loss of IP protection may restrict Aston Martin Lagonda’s ability to

exploit its brands, designs or technological advances profitably or may lead to a reduction in

future income as other manufacturers may be able to manufacture and market products similar

to those developed by Aston Martin Lagonda with fewer development expenses of their own,

and hence more cost-effectively. This could harm Aston Martin Lagonda’s competitive position.

Moreover, high costs may be incurred in responding to infringements of IP or disclosure of

misappropriations of Aston Martin Lagonda’s know-how and trade secrets. The occurrence of any

of these events may have a material adverse effect on the Group’s business, financial condition

and results of operations.

It cannot be ruled out that Aston Martin Lagonda may be held liable for an infringement of

third-party intellectual property or misappropriation of third-party know-how or trade secrets

or may be dependent upon the costly use of third-party intellectual property.

Although the Group endeavours to hold all the rights required for its business operations (its

own IP and third-party licences), the risk of infringement or misappropriation of IP and

know-how/trade secrets of third parties cannot be completely excluded, since many competitors

and suppliers also submit patent applications for their inventions and subsequently secure patent

protection or other IP. Moreover, findings of infringements or other violations by courts or even

the mere assertion of infringements or violations of IP rights or know-how/trade secrets could

have a negative effect on Aston Martin Lagonda. In such cases, Aston Martin Lagonda may be

barred from marketing products in the jurisdiction concerned and might potentially be

compelled to acquire licences on unfavourable terms or modify its manufacturing processes. This

could lead to further legal disputes or settlement negotiations, which may give rise to significant

costs and may disrupt Aston Martin Lagonda’s operations. In addition, Aston Martin Lagonda

could be required to pay damages or redesign products or processes infringing or

misappropriating IP. There is no guarantee that Aston Martin Lagonda will be able to obtain the

licences necessary for its business success in the future to the extent necessary and on reasonable

terms and conditions. Aston Martin Lagonda also relies on licences of certain IP from third parties

and cannot rule out that these licences could be terminated under certain circumstances. There

can also be no assurance that the existing licensing agreements will be extended.

All the above factors could, individually or collectively, lead to delivery and production

restrictions and/or interruptions and have a material adverse effect on the Group’s business,

financial condition and results of operations.

Aston Martin Lagonda relies on confidential know-how and trade secrets to protect its IP that

cannot be patented and depends on the confidentiality of this information being maintained.

Certain of Aston Martin Lagonda’s secret and confidential information cannot be or has not been

patented and requires confidentiality restrictions to be put in place with those to whom this

information is disclosed to protect this proprietary information. Such obligations rely on

individuals complying with those obligations and, if there are breaches, valuable information

could fall into the public domain and be used by Aston Martin Lagonda’s competitors. Equally,

the movement of employees between Aston Martin Lagonda and its competitors could result in

an increased risk of this information being shared with and used by competitors.

These factors could, individually or collectively, lead to Aston Martin Lagonda’s competitors

having access to its confidential information and using it to their advantage, which could have a

material adverse effect on the Group’s business, financial condition and results of operations.

Aston Martin Lagonda is exposed to operational risks, including risks in connection with the use

of information technology and personal data.

Due to its complex manufacturing, research, procurement, and sales and marketing operations,

Aston Martin Lagonda is exposed to a variety of financial and operational risks, including in

respect of the use of information technology and personal data. These risks include, but are not

limited to, losses that are caused by:

(i) disruption or malfunction of IT systems, including hardware, platforms, technologies,

applications, computer networks and telecommunications systems (including as a result of

malicious acts by third parties and employees);

(ii) disruption, damage or interruption to power supply;

(iii) mechanical or equipment failures;

(iv) human error or violation of internal policies or legal requirements by employees; or

(v) natural disasters.

If any IT system used by Aston Martin Lagonda in the conduct of its business, including those of

its third-party service providers, fails to function properly and cannot be remedied, Aston Martin

Lagonda’s business may experience material disruption that could require significant additional

investment to remedy or may not be capable of remedy at all.

Aston Martin Lagonda is generally exposed to risks in the field of information technology

because unauthorised access to or misuse of data processed on its IT systems or those of its third-

party service providers (including cloud-based providers), cybercrime, human errors associated

therewith, end of life applications or technological failures of any kind could disrupt Aston

Martin Lagonda’s operations, including the manufacturing, design and engineering process. In

particular, cybercrime can be technologically sophisticated and it may be difficult or impossible to

detect and defend against. A significant malfunction or disruption in Aston Martin Lagonda’s IT

systems or those of its third-party service providers (including cloud-based providers), or a

security breach that compromises the confidential and sensitive information stored in any of

those systems, could disrupt Aston Martin Lagonda’s business and materially affect Aston Martin

Lagonda’s trade secrets, reputation and IP and customer base, which could then, for example,

expose it to potential liability or litigation (including in respect of enforcement action by

regulators in respect of data protection and related laws and regulations) or additional costs to

its operations to address such a disruption. As Aston Martin Lagonda’s technology continues to

evolve, including the increasing use of internet-connected vehicle components, the Company will

likely collect and store even more data in the future and that Aston Martin Lagonda’s IT systems

and those of its third-party service providers (including cloud-based providers) will face an

increased risk of both wilful and unintentional security breaches.

As part of its business, Aston Martin Lagonda collects, retains and processes certain confidential

information, including the personal data of customers and employees. As a result, Aston Martin

Lagonda’s operations are subject to data protection and privacy laws, including the EU General

Data Protection Regulation (GDPR). The GDPR, which came into force on 25 May 2018, has

increased Aston Martin Lagonda’s regulatory responsibilities when processing personal customer,

employee and other data in the conduct of its business and may lead to significant financial

penalties if Aston Martin Lagonda breaches the requirements of the GDPR.

If the measures put in place to protect against operational risks, risks in connection with the use

of IT and the security of personal data collected by the Group prove insufficient, the Group’s

results of operations and financial condition may be materially affected.

Compliance with certain vehicle safety regulations may have an adverse effect on Aston Martin

Lagonda.

New regulations with respect to vehicle safety (including vehicle-to-vehicle and

vehicle-to-infrastructure communications and related technologies) could come into force in the

near future. For example, the US National Highway Travel Safety Administration has issued a

notice of proposed rulemaking that would require all new light vehicles to be capable of

vehicle-to-vehicle communications, such that they will send and receive basic safety messages to

and from other vehicles. These regulations may require Aston Martin Lagonda to develop (or

purchase) new products and technologies, resulting in additional costs and risks associated with

its ability or inability to develop or procure compliant systems.

Aston Martin Lagonda may become subject to risks arising from legal disputes and may become

the subject of government investigations.

In connection with Aston Martin Lagonda’s general business activities, it may become the subject

of legal disputes and governmental or regulatory investigations in the United Kingdom as well as

in other jurisdictions. Such investigations may, in particular, arise from its relationships with

authorities, suppliers, dealers, customers or investors. Aston Martin Lagonda may be required to

pay fines, take certain actions or refrain from other actions. The Group operates in several

jurisdictions around the world and is subject to local laws and regulations, which could vary

significantly from the laws and regulations of the United Kingdom and the United States. For

example, in connection with certain arbitration proceedings in China pursued by a terminated

dealer, three Chinese bank accounts have been frozen (holding the pound sterling equivalent of

£8.7 million in total) pursuant to property protection orders routinely granted by local

authorities for the benefit of claimants in arbitral proceedings. While the Group is challenging

these orders to free its assets, the Group cannot guarantee that it will succeed in doing so or that

this, or other similar actions in other jurisdictions, will not interfere with day-to-day local

operations.

To the extent that customers, particularly in the United States, assert claims in relation to defects

individually or in a class action lawsuit, Aston Martin Lagonda may be compelled to initiate costly

defence measures and pay significant amounts in damages. Complaints, actions relating to

patent rights and antitrust disputes brought by suppliers, dealers, investors or other third parties

may result in legal costs, the award of damages and/or reputational damage.

Since a number of risks cannot be reliably predicted, losses could exceed insured amounts or

amounts recognised as provisions. In addition, any claims, whether or not successful, could have

an adverse effect on Aston Martin Lagonda’s brand and reputation. Furthermore, given the

relatively small scale of its operations, the consequences of any claims and the related

management time required to deal with such claims could have a significant effect on Aston

Martin Lagonda’s ability to operate its business.

Aston Martin Lagonda may become subject to product liability claims.

The automobile industry experiences significant product liability claims and Aston Martin

Lagonda is exposed to an inherent risk of exposure to such a claim where its cars do not perform

as expected or malfunction resulting in personal injury or death. Additionally, failure to keep up

with state-of-the-art technologies could be considered as a defect and lead to an increased risk

from a product liability perspective.

From time to time, Aston Martin Lagonda is, and may in the future become, subject to product

liability claims. Where a product liability claim is successful, it could result in a substantial

monetary award and significant reputational damage to the brand. While Aston Martin Lagonda

insures against such risks, there can be no guarantee that any claim under the appropriate

insurance policy will be honoured fully or in a timely manner or that the insurance cover will be

sufficient to meet the full monetary award in connection with a claim. Further, Aston Martin

Lagonda may not be able to secure additional product liability insurance cover on commercially

acceptable terms or at reasonable cost when needed, particularly if it does face liability for its

products and is forced to make a claim under existing policies.

Aston Martin Lagonda is exposed to risks in connection with product-related guarantees and

warranties as well as the provision of voluntary services, which may be costly.

Aston Martin Lagonda is obliged to provide extensive warranties to its customers, dealers and

distributors. There is a risk that, relative to the guarantees and warranties provided, the

calculated product prices and the provisions for its guarantee and warranty risks have been set,

or will in the future be set, too low. In 2017, 2018 and 2019 the Group held a provision of

£20.9 million, £23.7 million and £28.2 million, respectively, for expected claims based on volume

of cars built per year and past experience of the level of actual warranty claims received. There is

also a risk that Aston Martin Lagonda will be required to extend the guarantee or warranty

originally granted in certain markets, or to provide services as a courtesy or for reasons of

reputation where it is not legally obliged to do so, and for which Aston Martin Lagonda will

generally not be able to assert claims in recourse against suppliers or insurers. In addition, the

Group may from time to time be required to recall certain products. Any of the foregoing could

have a material adverse effect on the Group’s business, financial condition and results of

operations.

Risks relating to the Rights Issue and investment in Shares

The Major Shareholders and the Yew Tree Consortium will have significant interests in the

Company following the Capital Raise, and their interests may differ from those of other

Shareholders.

Immediately following Admission of the Placing Shares, the Prestige/SEIG Shareholder Group, the

Adeem/PW Shareholder Group and the Yew Tree Consortium are expected to beneficially own

24.70 per cent., 22.99 per cent. and 16.67 per cent., respectively, of the issued ordinary share

capital of the Company.

The Prestige/SEIG Shareholder Group has irrevocably undertaken to take up 100 per cent. of its

entitlements under the Rights Issue, and the Adeem/PW Shareholder Group has agreed to sell

such number of Nil Paid Rights to the Yew Tree Consortium which will result in (i) the Adeem/PW

Shareholder Group taking up 38.9 per cent. of its entitlements under the Rights Issue and (ii) the

Yew Tree Consortium taking up the remainder of the Adeem/PW Shareholder Group’s

entitlements. The Yew Tree Consortium has, in addition, irrevocably undertaken to take up 100

per cent. of its entitlements under the Rights Issue.

Immediately following Admission of the New Shares, (i) the Prestige/SEIG Shareholder Group is

expected to beneficially own 24.70 per cent. of the Company’s share capital, being the

contemplated position assuming full take up by the Prestige/SEIG Shareholder Group of its

entitlements under the Rights Issue, (ii) the Adeem/PW Shareholder Group is expected to

beneficially own 17.95 per cent. of the Company’s share capital, being the contemplated position

assuming 38.9 per cent. take up by the Adeem/PW Shareholder Group of its entitlements under

the Rights Issue and (iii) the Yew Tree Consortium is expected to beneficially own 21.71 per cent.

of the Company’s share capital, being the contemplated position assuming full take up by the

Yew Tree Consortium of its entitlements under the Rights Issue, as well as the entitlements in

respect of the Nil Paid Rights that it has agreed to purchase from the Adeem/PW Shareholder

Group.

If the Prestige/SEIG Shareholder Group were to hold more than 25 per cent. of the issued Shares

following Admission of the New Shares, it would have the power to block special resolutions of

the Company. Further, under their respective relationship agreements with the Company, each of

the Yew Tree Consortium and each of the Major Shareholder Groups shall be able to nominate

two non-executive directors to the Board so long as it maintains a shareholding that exceeds the

lowest percentage shareholding of each of the Yew Tree Consortium, the Prestige/SEIG

Shareholder Group and the Adeem/PW Shareholder Group upon completion of the Rights Issue,

but in all cases not below 17.5 per cent. One of the Yew Tree Consortium’s appointees will be

Lawrence Stroll, who will serve as Executive Chair effective on 7 April 2020. Therefore,

immediately following completion of the Capital Raise, the Major Shareholders and the Yew Tree

Consortium will, in aggregate, control six of the 13 Board seats, including Lawrence Stroll as

Executive Chair.

The interests of the Major Shareholders and the Yew Tree Consortium may not necessarily be

aligned with each other or with those of other Shareholders.

The Company has entered into separate relationship agreements with each of the Major

Shareholders and the Yew Tree Consortium, the principal purpose of which is to document the

aforementioned director nomination rights and certain other governance arrangements between

the Company and each of the Major Shareholders and the Yew Tree Consortium.

Each of the Major Shareholders and the Yew Tree Consortium will be able to exercise significant

influence over matters requiring shareholder approval (including the election of directors and

significant transactions) and through their board appointment rights. The concentration of

ownership may have the effect of delaying, deterring or preventing a change in control, merger,

consolidation, takeover or other business combination or discouraging a potential acquirer from

making a tender offer or otherwise attempting to obtain control, which could in turn have an

adverse effect on the trading price of the Shares.

The market price of the Shares could be negatively affected by sales of substantial amounts of

such Shares in the public markets or the perception that these sales could occur.

Following Admission of the New Shares, the Major Shareholders and the Yew Tree Consortium

are expected to beneficially own, in aggregate, 64.36 per cent. of the Company’s share capital

(subject to the assumptions set out in the immediately preceding risk factor). The issue or sale of

a substantial number of Shares by the Company, the Major Shareholders, the Yew Tree

Consortium, the Directors or the Senior Managers in the public market, or the perception that

these sales may occur, may depress the market price of the Shares and could impair the

Company’s ability to raise capital through the sale of additional equity securities.

If the Major Shareholders, the Yew Tree Consortium, the Directors and/or certain other

Shareholders purchase additional Nil Paid Rights and/or Fully Paid Rights during the Rights Issue

offer period, the Company may cease to comply with the free float requirement under Listing

Rule 6.14, and therefore, absent a modification from the FCA, the Shares may be suspended or

cancelled from the premium listing segment of the Official List in order to maintain the smooth

operation of the market or to protect investors.

Listing Rule 6.14 requires that 25 per cent. or more of a class of shares admitted to the premium

listing segment of the Official List be held in public hands in the European Economic Area (EEA)

including the United Kingdom. Shares held by (i) Directors and their connected persons,

(ii) persons who hold five per cent. or more of the Shares and (iii) non-EEA/UK Shareholders are

not regarded as being held in public hands in the EEA/UK for purposes of Listing Rule 6.14.

The Prestige/SEIG Shareholder Group has irrevocably undertaken to take up 100 per cent. of its

entitlements under the Rights Issue, and the Adeem/PW Shareholder Group has agreed to sell

such number of Nil Paid Rights to the Yew Tree Consortium which will result in (i) the Adeem/PW

Shareholder Group taking up 38.9 per cent. of its entitlements under the Rights Issue and (ii) the

Yew Tree Consortium taking up the remainder of the Adeem/PW Shareholder Group’s

entitlements. The Yew Tree Consortium has, in addition, irrevocably undertaken to take up 100

per cent. of its entitlements under the Rights Issue.

Assuming 100 per cent. take up by the Prestige/SEIG Shareholder Group, the Yew Tree

Consortium (including the Nil Paid Rights it has agreed to purchase from the Adeem/PW

Shareholder Group), other persons holding five per cent. or more of the Shares, the Directors and

their connected persons and non-EEA/UK Shareholders of their entitlements under the Rights

Issue, and 38.9 per cent. take up by the Adeem/PW Shareholder Group, the Company’s free float

would be 27.20 per cent. immediately following completion of the Rights Issue.

However, it is possible that any of the aforementioned entities may purchase additional Nil Paid

Rights and/or Fully Paid Rights during the Rights Issue offer period such that the number of

Shares not held in public hands in the EEA/UK would cause the Company’s free float to fall below

25 per cent. immediately following completion of the Rights Issue.

Failure to comply with Listing Rule 6.14 without a modification from the FCA could result in the

FCA either suspending or cancelling the listing of the Shares. If the Company becomes aware that

its free float has fallen below 25 per cent. during or following the Rights Issue, it will notify the

FCA without delay and apply to it for a modification in respect of the free float requirement.

There is no certainty that such modification will be granted by the FCA, and even if granted, such

modification can be revoked at any time by the FCA. In the event that such modification is not

granted, or is granted and subsequently revoked, the FCA may allow a reasonable time to restore

the free float, but may also suspend or cancel the Shares from the premium listing segment of

the Official List if doing so is necessary to maintain the smooth operation of the market or to

protect investors. A suspension or cancellation of the Company’s Shares would cause the Shares

to cease trading on the London Stock Exchange. As a result, there would be no active trading

market for the Shares, and the value of the Shares would likely decrease as a result of the lack of

market liquidity.

The market price of the Nil Paid Rights, Fully Paid Rights and/or Shares could be subject to

volatility.

The market price of the Nil Paid Rights, the Fully Paid Rights and/or the Shares could be subject

to significant fluctuations due to a change in sentiment in the market regarding the Nil Paid

Rights, the Fully Paid Rights and/or the Shares (or securities similar to them), including, in

particular, in response to various facts and events, including any regulatory changes affecting the

Group’s operations, variations in the Group’s operating results and/or business developments of

the Group and/or its competitors. Stock markets have from time to time experienced significant

price and volume fluctuations that have affected the market prices for securities and which may

be unrelated to the Company’s operating performance or prospects. Furthermore, the Group’s

operating results and prospects from time to time may be below the expectations of market

analysts and investors. Any of these events could result in a decline in the market price of the Nil

Paid Rights, the Fully Paid Rights and/or the Shares.

An active trading market for the New Shares, Nil Paid Rights and Fully Paid Rights may not

develop.

Application has been made to admit the New Shares (nil and fully paid) to trading on the London

Stock Exchange’s main market for listed securities. It is expected that dealings in rights to acquire

the New Shares on the London Stock Exchange’s main market for listed securities will commence

at 8.00 a.m. on 18 March 2020. There can be no assurance, however, that an active trading

market in Nil Paid Rights, Fully Paid Rights or New Shares will develop.

The market price for the Shares may decline below the Issue Price and Shareholders may not be

able to sell Shares at a favourable price after the Rights Issue.

The public trading market price of the Shares may decline below the Issue Price. Should that

occur prior to the latest time and date for acceptance under the Rights Issue, Qualifying

Shareholders or renouncees who exercise their rights in the Rights Issue will suffer an immediate

loss as a result. Moreover, following the exercise of their rights, Shareholders may not be able to

sell their New Shares at a price equal to or greater than the acquisition price for those shares.

Although the Group has no current plans for a subsequent offering of Shares, it is possible that it

may decide to undertake such an offering in the future. An additional offering could have an

adverse effect on the market price of the outstanding Shares.

Investors in the Nil Paid Rights, Full Paid Rights and/or New Shares may be subject to exchange

rate risk.

The New Shares, Nil Paid Rights and Fully Paid Rights are priced in pounds sterling. Accordingly,

any investor outside the United Kingdom is subject to adverse movements to their local currency

against pounds sterling.

It may not be possible to effect service of process upon the Company or the Directors or enforce

court judgments against the Company or the Directors.

The Company is incorporated in England and Wales. As a result, it may not be possible for

investors outside of the United Kingdom to effect service of process outside the United Kingdom

against the Company or the Directors or to enforce the judgement of a court outside the United

Kingdom against the Company or the Directors.

The Company does not currently pay dividends on the Shares and its ability to do so in the

future will depend on the availability of distributable reserves.

The Company’s ability to pay dividends is limited under English company law, which limits a

company to only paying cash dividends to the extent that it has distributable reserves and cash

available for this purpose. As a holding company, the Company’s ability to pay dividends in the

future is affected by a number of factors, principally its ability to receive sufficient dividends

from subsidiaries. The payment of dividends to the Company by its subsidiaries is, in turn, subject

to restrictions, including certain regulatory requirements and the existence of sufficient

distributable reserves and cash in the Company’s subsidiaries. The ability of these subsidiaries to

pay dividends and the Company’s ability to receive distributions from its investments in other

entities are subject to applicable local laws and regulatory requirements and other restrictions,

including, but not limited to, applicable tax laws and covenants in some of the Company’s debt

facilities. These laws and restrictions could limit the payment of dividends and distributions to

the Company by its subsidiaries, which could restrict the Company’s ability to fund other

operations or to pay a dividend to the Shareholders.

Shareholders who do not acquire New Shares in the Rights Issue will experience dilution in their

ownership of the Company, and all Shareholders will experience dilution as a result of the

Placing.

If a Shareholder does not take up the offer of New Shares under the Rights Issue, either because

the Shareholder is in the United States, an Excluded Territory or another jurisdiction where their

participation is restricted for legal, regulatory and other reasons or because the Shareholder does

not respond to the Rights Issue by 11.00 a.m. on 1 April 2020, the expected latest time and date

for acceptance and payment in full for that Shareholder’s provisional allotment of New Shares,

and that Shareholder’s Nil Paid Rights to acquire New Shares lapse, the Shareholder’s

proportionate ownership and voting interests as well as the percentage that their Shares will

represent of the total share capital of the Company will be reduced accordingly. Even if a

Shareholder elects to sell their unexercised Nil Paid Rights, or such Nil Paid Rights are sold on

their behalf, the consideration the Shareholder receives may not be sufficient to compensate

them fully for the dilution of their percentage ownership of the Company’s share capital that

may be caused as a result of the Rights Issue.

The Company has made arrangements under which the Underwriters, within the two Business

Day period following the expiration of the latest time and date for acceptance and payment, will

endeavour, on behalf of Shareholders that do not take up New Shares provisionally allotted, to

find acquirers for New Shares not taken up by Shareholders. If, however, the Underwriters are

unable to find acquirers for such New Shares or are unable to achieve a specified premium over

the Issue Price and the related expenses of procuring such acquirers, Shareholders will not receive

any consideration for the Nil Paid Rights they have not taken up. Furthermore, to the extent that

Shareholders do not exercise their Nil Paid Rights to acquire New Shares, their proportionate

ownership and voting interest in the Shares of the Company (upon the issue of New Shares) will,

accordingly, be reduced, and the percentage that their Existing Shares represent of the

Company’s increased share capital after the issue of New Shares will accordingly be reduced.

In addition, all Shareholders will experience a dilution of their shareholding in the Company of

16.67 per cent. as a result of the Placing.

Shareholders outside the United Kingdom may not be able to acquire New Shares in the Rights

Issue.

Securities laws of certain jurisdictions may restrict the Company’s ability to allow participation by

Shareholders in the Rights Issue. In particular, holders of Shares who are located in the United

States may not be permitted to take up their entitlements under the Rights Issue unless an

exemption from the registration requirements is available under the Securities Act. The Rights

Issue will not be registered under the Securities Act. Securities laws of certain other jurisdictions

(including the Excluded Territories) may restrict the Company’s ability to allow participation by

Shareholders in such jurisdictions in any future issue of shares carried out by the Company.

Qualifying Shareholders who have a registered address in or who are resident in, or who are

citizens of, countries other than the United Kingdom should consult their professional advisers as

to whether they require any governmental or other consents or need to observe any other

formalities to enable them to take up their Nil Paid Rights or to acquire Fully Paid Rights or

acquire New Shares.

IMPORTANT INFORMATION

ENERAL

The Company will update the information provided in this document by means of a supplement

if a significant new factor that may affect the evaluation by prospective investors of the offer

occurs after the publication of this document or if this document contains any material mistake

or substantial inaccuracy. This document and any supplement will be subject to approval by the

FCA (as competent authority under Regulation (EU) 2017/1129) and will be made public in

accordance with the Prospectus Regulation Rules. If a supplement to this document is published

prior to Admission of the New Shares, investors shall have the right to withdraw their

applications for New Shares made prior to the publication of the supplement. Such withdrawal

must be made within the time limits and in the manner set out in any such supplement (which

shall not be shorter than two clear Business Days after publication of the supplement).

ARKET AND INDUSTRY INFORMATION

Unless the source is otherwise stated, the market, economic and industry data in this document

constitute the Directors’ estimates, using underlying data from independent third parties. Market

data and certain industry data and forecasts included in this document have been obtained from

internal company surveys, market research, consultant surveys, publicly available information,

reports of governmental agencies and industry publications and surveys, including (i) the World

Wealth Report, Capgemini, 2019 and (ii) data compiled by IHS Markit.

The Company confirms that all third-party data contained in this document has been accurately

reproduced and, so far as the Company is aware and able to ascertain from information

published by that third party, no facts have been omitted that would render the reproduced

information inaccurate or misleading. Where third-party information has been used in this

document, the source of such information has been identified. While industry surveys,

publications, consultant surveys and forecasts generally state that the information contained

therein has been obtained from sources believed to be reliable, the accuracy and completeness of

such information is not guaranteed. The Company has not independently verified any of the data

from third-party sources, nor has the Company ascertained the underlying economic assumptions

relied upon therein. Similarly, internal surveys, industry forecasts and market research, which the

Company believes to be reliable based upon the Directors’ knowledge of the industry, have not

been independently verified. Statements as to the Group’s market position are based on recently

available data.

AUTIONARY NOTE REGARDING FORWARD

LOOKING STATEMENTS

This document includes certain forward-looking statements, forecasts, estimates, projections and

opinions (Forward-looking Statements). When used in this document, the words “anticipate”,

“believe”, “estimate”, “forecast”, “expect”, “intend”, “plan”, “project”, “may”, “will” or

“should” or, in each case, their negative or other variations or similar expressions, as they relate

to the Group, its management or third parties, identify Forward-looking Statements. Forward-

looking Statements include statements regarding the Group’s business strategy, objectives,

financial condition, results of operations and market data, as well as any other statements that

are not historical facts. These statements reflect beliefs of the Directors (including based on their

expectations arising from pursuit of the Group’s strategy), as well as assumptions made by the

Directors and information currently available to the Company.

Although the Company believes that these beliefs and assumptions are reasonable, by their

nature, Forward-looking Statements involve known and unknown risks, uncertainties,

assumptions and other factors because they relate to events and depend on circumstances that

will occur in the future whether or not outside the control of the Company. These factors, risks,

uncertainties and assumptions could cause actual outcomes and results to be materially different

from those projected. Past performance cannot be relied upon as a guide to future performance

and should not be taken as a representation that trends or activities underlying past performance

will continue in the future. No representation is made or will be made that any Forward-looking

Statements will be achieved or will prove to be correct. These factors, risks, assumptions and

uncertainties expressly qualify all subsequent oral and written Forward-looking Statements

attributable to the Group or persons acting on its behalf.

None of the Company, the Directors or the Underwriters assume any obligation to update any

Forward-looking Statement and disclaims any obligation to update its view of any risks or

uncertainties described herein or to publicly announce the result of any revisions to the Forward-

looking Statements made in this document, except as required by law (including, for the

avoidance of doubt, the Prospectus Regulation Rules, the Listing Rules and Disclosure Guidance

and Transparency Rules).

In addition, this document contains information concerning the Group’s industry and its market

and business segments generally, which is forward-looking in nature and is based on a variety of

assumptions regarding the ways in which the industry, and the Group’s market and business

segments, will develop. These assumptions are based on information currently available to the

Company. If any one or more of these assumptions turn out to be incorrect, actual market results

may differ from those predicted. While the Company does not know what effect any such

differences may have on the Group’s business, if there are such differences, they could have a

material adverse effect on the Group’s future results of operations and financial condition.

RESENTATION OF

INANCIAL

NFORMATION

Unless otherwise indicated, the historical and other financial information presented in this

document has been derived from (i) the audited consolidated financial statements of the

Company as of and for the year ended 31 December 2019 (the 2019 Financial Statements) and

(ii) the audited consolidated financial statements of the Company as of and for the year ended

31 December 2018 (the 2018 Financial Statements), each included elsewhere in this document.

On 3 September 2018, the Company obtained control of the entire share capital of Aston Martin

Holdings (UK) Limited (AM Holdings) by way of a share for share exchange. Although the share

for share exchange resulted in a change in legal ownership, in substance the consolidated

financial information presented for the periods ended 31 December 2018 and 31 December 2019

represent the continuation of the pre-existing group headed by AM Holdings. Consequently,

references in this document to the “Group” or “Aston Martin Lagonda” in the context of

historical financial information or other financial information prior to the year ended

31 December 2018 relate to AM Holdings and its subsidiaries and do not include Aston Martin

Lagonda Global Holdings plc; and references to the “Group” or “Aston Martin Lagonda” in the

context of historical financial information or other financial information from the year ended

31 December 2018 onwards relate to Aston Martin Lagonda Global Holdings plc and its

subsidiaries.

The 2018 Financial Statements and the 2019 Financial Statements are presented in pounds

sterling and have been prepared in accordance with IFRS as adopted by the European Union.

IFRS 16

IFRS 16 (Leases) became effective for periods beginning on or after 1 January 2019. The 2019

Financial Statements give effect to the entry into force of IFRS 16 (Leases). The new standard

replaces the previous accounting standard, IAS 17 (Leases), including related interpretations. The

Company has applied exemptions for short-term leases and leases of low value items and chose

to adopt the modified retrospective transition approach for IFRS 16 under which, prior to

reflecting the impact of lease incentives, the Company evaluated its lease liability using

incremental borrowing rates assessed at the date of transition with a right of use asset of equal

value. The Company’s equity reserves as of 1 January 2019 have been adjusted to reflect the

de-recognition of legal and other costs associated with lease agreements previously expensed

over the lease term. Whilst qualifying costs of this nature incurred would be included in the value

of the associated right of use asset on adoption of IFRS 16, under the transition approach

adopted, this treatment is not followed. There have been no IFRS 16 adjustments made to the

consolidated income statements for the periods prior to 1 January 2019. See notes 2 and 16 of

the 2019 Financial Statements. See also “IFRS 16” in Part V - Operating and Financial Review.

Restated 2018 Financial Information

Certain reclassifications have been made in the statement of financial position in the 2019

Financial Statements regarding the 2018 comparative values, including:

(i) a reclassification of service plan liabilities from non-current provisions into current and

non-current trade and other payables;

(ii) a reclassification of lease incentives from current trade and other payables to

non-current trade and other payables; and

(iii) an offset of deferred tax assets and deferred tax liabilities where a right of offset exists

in certain jurisdictions.

Additional information is presented in note 2 of the 2019 Financial Statements.

The following table sets forth the impact on these reclassifications on the 2018 comparative

values in the statement of financial position in the 2019 Financial Statements.

2018 values

as disclosed

in the 2018

Financial

Statements (i) (ii) (iii)

2018 values

as restated

in the 2019

Financial

Statements

(£ millions)

(unaudited)

Non-current assets

Deferred tax assets .................. 123.1 - - (91.0) 32.1

Current liabilities

Trade and other payables ............ (696.1) (5.2) 30.3 - (671.0)

Non-current liabilities

Trade and other payables ............ (12.2) (7.3) (30.3) - (49.8)

Provisions .......................... (25.4) 12.5 - - (12.9)

Deferred tax liabilities ............... (111.0) - - 91.0 (20.0)

IFRS 15

IFRS 15 (Revenue from Contracts with Customers) became effective for periods beginning on or

after 1 January 2018. The new standard integrates the various previously existing IFRS

requirements and interpretations relating to revenue recognition into a single standard and

establishes the principles which an entity needs to apply when reporting information about the

nature, amount, timing and uncertainty of revenue and cash flows from a contract with a

customer. The Company has applied the new requirements for revenue from contracts with

customers in the year ended 31 December 2018 using the “full retrospective” option. As a result,

the Company presents, within the audited consolidated financial statements as of and for the

year ended 31 December 2018, a restatement of the audited comparative periods (the Restated

2017 Financial Information). The Restated 2017 Financial Information is presented in this

document and further information in relation to the restatement is included in note 2 of the

2018 Financial Statements.

LTERNATIVE

ERFORMANCE

EASURES

This document contains certain alternative performance measures (APMs) that are not defined or

recognised under IFRS, including Adjusted Operating Profit (EBIT), Adjusted EBITDA, Net Debt,

Adjusted Leverage Ratio, Adjusted Return on Invested Capital and certain income statement line

items excluding the impact of the Preference Shares.

APMs should not be considered in isolation and investors should not consider such information as

alternatives to revenue, profit before tax or cash flows from operations calculated in accordance

with IFRS, as indications of operating performance or as measures of the Group’s profitability or

liquidity. Such financial information must be considered only in addition to, and not as a

substitute for or superior to, financial information prepared in accordance with IFRS included

elsewhere in this document. Investors are cautioned not to place undue reliance on these APMs

and are also advised to review them in conjunction with the 2018 Financial Statements and the

2019 Financial Statements included elsewhere in this document.

Adjusted Operating Profit (EBIT) and Adjusted EBITDA

Adjusted Operating Profit (EBIT), as used in this document, represents profit / (loss) for the

period, before income tax (charge) / credit and net financing expense, and adjust for items of

which the Directors believe the quantum, nature and volatility would distort the underlying

trading performance of the Group, including the tax effect thereof.

Adjusted EBITDA, as used in this document, represents Adjusted Operating Profit (EBIT) before

profit and loss on the disposal of fixed assets and depreciation, amortisation and impairment.

The Group presents Adjusted Operating Profit (EBIT) and Adjusted EBITDA because the Directors

believe that these APMs contribute to a better understanding of the Group’s results of

operations by providing additional information on what the Directors consider to be some of the

drivers of the Group’s financial performance. Furthermore, the Directors believe that these APMs

are widely used by certain investors, securities analysts and other interested parties as

supplemental measures of performance.

The following table sets out the reconciliation of Adjusted Operating Profit (EBIT) and Adjusted

EBITDA from profit/(loss) for the periods indicated.

For the year ended 31 December

2017

(1)

2018 2019

(£ millions)

(audited)

Profit/(loss) for the period .................................. 76.8 (57.1) (104.4)

Income tax (credit)/expense ................................. 7.7 (11.1) 0.1

Net financing expense

(2)

.................................... 64.3 141.0 67.6

Adjusting items

(3)

.......................................... (24.3) 74.1 42.1

Adjusted Operating Profit (EBIT) ............................. 124.5 146.9 5.4

Depreciation, amortisation and impairment ................... 82.1 100.0 127.9

Profit/(loss) on sale of fixed assets ............................ (0.1) 0.4 0.9

Adjusted EBITDA ........................................... 206.5 247.3 134.2

Notes:

(1) Restated to reflect the adoption of IFRS 15. See note 2 of the 2018 Financial Statements.

(2) The net financing expense for the year ended 31 December 2018 includes the premium on the redemption of the

Preference Shares (£46.8 million) and the Preference Shares fee write-off (£15.1 million) which are one-off items.

(3) Adjusting operating items for 2017 related to a credit arising from the reduction in the pension scheme deficit in

2017. The adjusting operating items for 2018 related to the costs related to the AML IPO, including £61.2 million staff

incentives and £12.9 million professional fees. These costs included deferred staff incentives contingent on

performance of the Group following the AML IPO. IPO-related bonuses subject to 2019 performance will not be paid

as targets were not met, resulting in £4.2 million being credited back to the consolidated income statement in 2019 as

an adjusting item in order to remain consistent with the treatment of the initial accrual in 2018. Adjusting operating

items for 2019 related to the Rapide E impairment (£39.4 million), employee redundancy costs (£2.6 million) and costs

related to the AML IPO (including the aforementioned £4.0 million credit, pre-AML IPO long-term incentive plan costs

of £3.6 million and additional professional fees of £0.5 million).

Net Debt

Net Debt, represents the Group’s total current and non-current borrowings, excluding Preference

Shares, adjusted for cash and cash equivalents. In 2019, Net Debt was further adjusted for cash

held not available for short-term use and a £38.7 million inventory repurchase arrangement

(including £6.5 million of VAT) entered into in November 2019.

The Group presents Net Debt because the Directors believe that it contributes to a better

understanding of the Group’s liquidity and financial position by providing additional information

in respect of the Group’s ability to meet its financial obligations. Furthermore, the Directors

believe that Net Debt is widely used by certain investors, securities analysts and other interested

parties as a supplemental measure of liquidity and financial position.

The following table sets out the calculation of Net Debt for the periods indicated.

As at 31 December

2017

(1)

2018 2019

(£ millions)

(audited)

Cash and cash equivalents ..................................... 167.8 144.6 107.9

Cash held not available for short-term use ...................... - - 8.7

Loans and other borrowings - current .......................... (13.5) (99.4) (114.8)

Inventory repurchase arrangement ............................. - - (38.9)

Loans and other borrowings – non current ...................... (571.5) (604.7) (839.1)

Preference shares ............................................ (255.9) - -

Net Debt ................................................... (673.1) (559.5) (876.2)

Note:

(1) Restated to reflect the adoption of IFRS 15. See note 2 of the 2018 Financial Statements.

Adjusted Leverage Ratio

Adjusted Leverage Ratio is defined as Net Debt divided by Adjusted EBITDA (excluding the

impact of IFRS 16). Adjusted Leverage Ratio is a measure of liquidity, and the Group considers it

to be a useful metric to assess its ability to meet its financial obligations.

The following table sets out the calculation of Adjusted Leverage Ratio for the periods indicated.

As at and for the 12 months ended

31 December

2017

(1)

2018 2019

(£ millions, unless otherwise indicated)

(audited)

Net Debt .............................................................. (673.1) (559.5) (876.2)

Adjusted EBITDA ....................................................... 206.5 247.3 134.2

Impact of IFRS 16 on Adjusted EBITDA ..................................... - - (14.5)

Adjusted EBITDA (excluding the impact of IFRS 16) .......................... 206.5 247.3 119.7

Adjusted Leverage Ratio ................................................. 3.3x 2.3x 7.3x

Note:

(1) Restated to reflect the adoption of IFRS 15. See note 2 of the 2018 Financial Statements.

Adjusted Return on Invested Capital

Adjusted Return on Invested Capital represents Adjusted Operating Profit (EBIT) after tax divided

by the sum of gross debt, including inventory repurchase arrangements whilst excluding lease

liabilities, and equity. The Group uses Adjusted Return on Invested Capital to assess the return

that is generated on the capital invested by the Group and believes that it is an important

measure for evaluating the quality of the Group’s investments and use of its capital.

As at and for the 12 months ended

31 December

2017

(1)

2018 2019

(£ millions, unless otherwise indicated)

(audited)

Adjusted Operating Profit (EBIT) .......................................... 124.5 146.9 5.4

Tax on Adjusted Operating Profit (EBIT) (credit) ............................. (3.6) 0.6 (8.9)

Adjusted Operating Profit (EBIT) after tax 120.9 147.5 (3.5)

Senior Secured Notes .................................................... 570.2 590.9 829.9

Unsecured loans ........................................................ 1.3 1.4 -

Inventory repurchase arrangement ........................................ - - 38.9

Loans and borrowings ................................................... - - 124.0

Current loans and borrowings ............................................ 13.5 99.4 -

Non-current loans and borrowings ........................................ - 12.4 -

Preference shares ....................................................... 255.9 - -

Gross debt ............................................................. 840.9 704.1 992.8

Equity ................................................................. 136.1 449.4 358.9

Gross debt and equity ................................................... 977.0 1,153.5 1,351.7

Adjusted Return on Invested Capital ...................................... 12.4% 12.8% (0.3)%

Note:

(1) Restated to reflect the adoption of IFRS 15. See note 2 of the 2018 Financial Statements.

Certain income statement line items excluding the impact of the Preference Shares

The Preference Shares are preference shares issued by Aston Martin Holdings (UK) Limited,

certain of which were allotted on 29 April 2015 with the remaining preference shares allotted on

15 April 2016. The Preference Shares were converted into Shares as part of the AML IPO.

The Group’s finance expenses include interest expense with respect to the Preference Shares.

Interest expense with respect to the Preference Shares was £37.9 million and £93.9 million

(including £32.0 million of interest expense and £61.9 million of costs in relation to the

conversion of the Preference Shares as part of the AML IPO) in 2017 and 2018, respectively.

The Group presents the below income statement line items excluding the impact of the

Preference Shares because the Directors believe that such presentation provides a better

understanding of the underlying drivers of the Group’s financial performance.

The following table shows the calculation of certain income statement line items excluding the

impact of the Preference Shares.

2017 2018 2019

(£ millions)

(audited, unless otherwise indicated)

Finance expense .......................................................... (99.9) (145.2) (83.9)

Expenses relating to the Preference Shares .................................. 37.9

(2)

93.9

(2)

Finance expense, excluding impact of the Preference Shares ................... (62.0)

(2)

(51.3)

(2)

(83.9)

Profit/(loss) before tax .................................................... 84.5 (68.2) (104.3)

Expenses relating to the Preference Shares .................................. 37.9

(2)

93.9

(2)

Profit/(loss) before tax, excluding impact of the Preference Shares .............. 122.4

(2)

25.7

(2)

(104.3)

Income tax (charge)/credit ................................................. (7.7) 11.1 (0.1)

Tax impact of the Preference Shares

(1)

....................................... - (2.9)

(2)

Income tax (charge)/credit, excluding impact of the Preference Shares ........... (7.7) 8.2

(2)

(0.1)

Profit/(loss) for the year ................................................... 76.8 (57.1) (104.4)

Tax impact of the Preference Shares

(1)

....................................... - (2.9)

(2)

Expenses relating to the Preference Shares .................................. 37.9

(2)

93.9

(2)

Profit/(loss) for the year, excluding impact of the Preference Shares ............. 114.7

(2)

33.9

(2)

(104.4)

Note:

(1) The estimated reduction in the tax credit attributable to the impact of excluding the Preference Share interest for the

year ended 31 December 2018 would be £2.9 million.

(2) Unaudited.

APMs do not constitute a measure of financial performance under IFRS and should not be

considered a substitute for operating income, net income, cash flow or other financial measures

computed in accordance with IFRS, or as a measure of the Group’s future results of operations or

liquidity.

OUNDING

Certain numerical figures included in this document have been rounded. Therefore, discrepancies

in tables between totals and the sums of the amounts listed may occur due to such rounding.

Percentages in tables have been rounded and accordingly may not add up to 100 per cent.

URRENCY INFORMATION

Unless otherwise indicated, references in this document to “pound sterling”, “GBP” or “£” are to

the lawful currency of the United Kingdom and references to “US dollars”, “dollars”, “US$” or

“$” are to the lawful currency of the United States of America.

ROFIT

ORECAST

No statement in this document is intended as a profit forecast and no statement in this document

should be interpreted to mean that earnings per share for the current or future financial years

would necessarily match or exceed the historical published earnings per share.

Notice to investors in the United States of America

Subject to certain exceptions, neither this document nor the Provisional Allotment Letter

constitutes, or will constitute, or forms part of any offer or invitation to sell or issue, or any

solicitation of any offer to purchase or acquire, New Shares, Placing Shares, Nil Paid Rights and/or

Fully Paid Rights to any Shareholder with a registered address in, or who is resident of, the

United States. If you are in the United States, you may not exercise your Nil Paid Rights or Fully

Paid Rights and/or acquire any New Shares offered hereby. Notwithstanding the foregoing, the

Company reserves the right to offer and deliver the Nil Paid Rights to, and the Fully Paid Rights

and the New Shares may be offered to and acquired by, a limited number of Shareholders in the

United States reasonably believed to be QIBs, within the meaning of Rule 144A, or to other

persons in offerings exempt from or in a transaction not subject to, the registration requirements

under the Securities Act. The Nil Paid Rights, the Fully Paid Rights and the New Shares being

offered outside the United States are being offered in reliance on Regulation S. If you are a QIB

located in the United States, in order to exercise your Nil Paid Rights or Fully Paid Rights and/or

acquire any New Shares upon exercise thereof, you must sign and deliver an investor letter.

If you sign such an investor letter, you will be, amongst other things: representing that you and

any account for which you are acquiring the New Shares, the Nil Paid Rights or the Fully Paid

Rights are a QIB; and agreeing not to reoffer, sell, pledge or otherwise transfer the New Shares,

the Nil Paid Rights, the Fully Paid Rights or the Provisional Allotment Letters, except: in an

offshore transaction in accordance with Rule 904 of Regulation S under the Securities Act (which,

for the avoidance of doubt, includes a sale over the London Stock Exchange), and neither the

seller nor any person acting on its behalf knows that the transaction has been pre-arranged with

a buyer in the United States; to a QIB in a transaction in accordance with Rule 144A; with respect

to the New Shares only, pursuant to Rule 144 under the Securities Act (if available); or in another

transaction pursuant to an exemption from, or in a transaction not subject to, the registration

requirements of the Securities Act, and, in each case, in compliance with any applicable securities

laws of any state or other jurisdiction of the United States.

No representation has been, or will be, made by the Company or the Underwriters as to the

availability of Rule 144 under the Securities Act or any other exemption under the Securities Act

or any applicable securities laws of any state or other jurisdiction of the United States for the

reoffer, pledge or transfer of the New Shares.

Any envelope containing a Provisional Allotment Letter and post-marked from the United States

will not be valid unless it contains a duly executed investor letter in the appropriate form as

described above, any Provisional Allotment Letter in which the exercising holder requests New

Shares to be issued in registered form and gives an address in the United States will not be valid

unless it contains a duly executed investor letter.

The payment paid in respect of Provisional Allotment Letters that do not meet the foregoing

criteria will be returned without interest.

Any person in the United States who obtains a copy of this document and who is not a QIB will

be unable to purchase or acquire Nil Paid Rights, Fully Paid Rights, New Shares and is required to

disregard this document.

VERSEAS TERRITORIES

Shareholders who have registered addresses in or who are resident in, or who are citizens of, all

countries other than the UK should refer to paragraph 2.5 of Part III - Terms and Conditions of

the Rights Issue.

OTICE TO

HAREHOLDERS

Any reproduction or distribution of this document, the Provisional Allotment Letters or the Forms

of Instruction, in whole or in part, and any disclosure of its contents or use of any information

contained in this document for any purpose other than considering an investment in the Nil Paid

Rights, the Fully Paid Rights or the New Shares is prohibited. By accepting delivery of this

document and, where applicable, the Provisional Allotment Letters or the Forms of Instruction,

each offeree of the Nil Paid Rights, the Fully Paid Rights and the New Shares agrees to the

foregoing.

The distribution of this document and any accompanying documents into jurisdictions other than

the United Kingdom may be restricted by law. Persons into whose possession these documents

come should inform themselves about and observe any such restrictions. Any failure to comply

with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

For further information on the Excluded Territories, please see Part III - Terms and Conditions of

the Rights Issue.

No action has been taken by the Company or by the Underwriters that would permit an offer of

the Nil Paid Rights, the Fully Paid Rights or the New Shares or possession or distribution of this

document, the Provisional Allotment Letters or any other offering or publicity material in any of

the Excluded Territories or in any other jurisdictions where the extension and availability of the

Rights Issue would breach any applicable law.

VAILABLE

NFORMATION

If, at any time, the Company is neither subject to Section 13 or Section 15(d) of the United States

Securities Exchange Act of 1934, as amended (the Exchange Act), nor exempt from reporting

pursuant to Rule 12g3-2(b) thereunder, the Company will furnish, upon request, to any holder or

beneficial holder of Shares, or any prospective purchaser designated by any such holder or

beneficial owner, the information required to be delivered pursuant to Rule 144A(d)(4) under the

Securities Act. In such cases, the Company will also furnish to each such owner all notices of

general Shareholders’ meetings and other reports and communications that the Group generally

makes available to Shareholders.

NFORCEMENT OF CIVIL LIABILITIES

The ability of an Overseas Shareholder to bring an action against the Company may be limited

under law. The Company is a public limited company incorporated in England and Wales. The

rights of holders of Shares are governed by English law and by the Company’s memorandum and

articles of association. These rights differ from the rights of shareholders in typical US

corporations and some other non-UK corporations.

An Overseas Shareholder may not be able to enforce a judgment against some or all of the

Directors and executive officers. The majority of the Directors and executive officers are residents

of the United Kingdom. Consequently, it may not be possible for an Overseas Shareholder to

effect service of process upon the Directors and executive officers within that Shareholder’s

country of residence or to enforce against the Directors and executive officers judgments of

courts of that Shareholder’s country of residence based on civil liabilities under that country’s

securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce

any judgments in civil and commercial matters or any judgments under the securities laws of

countries other than the United Kingdom against the Directors or executive officers who are

residents of the United Kingdom or countries other than those in which judgment is made. In

addition, English or other courts may not impose civil liability on the Directors or executive

officers in any original action based solely on the foreign securities laws brought against the

Company or the Directors in a court of competent jurisdiction in England or other countries.

RIGHTS ISSUE AND PLACING STATISTICS

Price per New Share under the Rights Issue .............................. 207pence

Basis of Rights Issue .................................................. 14NewShares for

every 25 Existing

Number of Shares in issue at 21 February 2020

(1)

.......................... 228,002,890

Number of New Shares to be issued by the Company under the Rights

Issue

(2)

............................................................ 153,217,942

Issue price per Placing Share ........................................... 400pence

Number of Placing Shares to be issued by the Company pursuant to the

Placing ............................................................ 45,600,577

Number of Shares in issue immediately following completion of the Capital

Raise

(2)

........................................................... 426,821,409

New Shares and Placing Shares as a percentage of enlarged issued share

capital of the Company immediately following completion of the Capital

Raise

(2)

............................................................ 47%

Approximate expenses in connection with the Capital Raise ................ £15million

Approximate net proceeds receivable by the Company from the Capital Raise

after expenses ..................................................... £485million

Notes:

(1) Being the latest practicable date prior to the date of this document.

(2) Assuming that no Shares are issued as a result of the exercise of any options between 21 February 2020, being the latest

practicable date prior to the publication of this document, and Admission of the New Shares becoming effective.

EXPECTED TIMETABLE FOR THE RIGHTS ISSUE AND THE PLACING

(1) (2)

Publication and posting of this document, which contains the

notice of General Meeting, the Form of Proxy or a Voting

Instruction Form ........................................... 27February 2020

Latest time and date for receipt of General Meeting Voting

Instruction Forms .......................................... 10.00 a.m. on 11 March 2020

Latest time and date for receipt of General Meeting Forms of

Proxy, submission of CREST Proxy Instructions or registration to

vote electronically ......................................... 10.00 a.m. on 12 March 2020

General Meeting .......................................... 10.00 a.m. on 16 March 2020

Issue of the Placing Shares .................................. 16March 2020

Record Date for entitlements under the Rights Issue ........... close of business on 16 March 2020

Listing and Admission of the Placing Shares ................... 8.00 a.m. on 17 March 2020

Despatch of Provisional Allotment Letters (to Qualifying

Non-CREST Shareholders only) and Forms of Instruction (to

Qualifying AML Nominee Service Shareholders only)

(3)

.........

17 March 2020

Admission of, and dealings commence in, Nil Paid Rights on the

London Stock Exchange .................................... 8.00 a.m. on 18 March 2020

Existing Shares marked ex-Rights (the Ex-Rights Date) by the

London Stock Exchange ....................................

8.00 a.m. on 18 March 2020

Nil Paid Rights and Fully Paid Rights enabled in CREST (for

Qualifying CREST Shareholders only

(3)

)........................

as soon as practicable after 8.00

a.m. on 18 March 2020

CREST stock accounts credited with Nil Paid Rights (for

Qualifying CREST Shareholders only

(3)

)........................

as soon as practicable after 8.00

a.m. on 18 March 2020

Latest time for receipt of instructions under Special Dealing

Service in respect of Cashless Take-up or disposal of Nil Paid

Rights ....................................................

5.00 p.m. on 25 March 2020

Recommended latest time for requesting withdrawal of Nil Paid

Rights or Fully Paid Rights from CREST (i.e. if your Nil Paid Rights

or Fully Paid Rights are in CREST and you wish to convert them

into certificated form) ......................................

4.30 p.m. on 26 March 2020

Dealings carried out in relation to the Cashless Take-up or

disposal of Nil Paid Rights under the Special Dealing Service ....

26 March 2020

Latest time and date for depositing renounced Provisional

Allotment Letters, nil paid or fully paid, into CREST or for

dematerialising Nil Paid Rights into a CREST stock account ......

3.00 p.m. on 27 March 2020

Latest time and date for splitting Provisional Allotment Letters,

nil or fully paid ............................................

3.00 p.m. on 30 March 2020

Despatch of cheques in relation to net proceeds of disposal of Nil

Paid Rights under the Special Dealing Service .................

30 March 2020

Latest time and date for acceptance and payment in full and

registration of renounced Provisional Allotment Letters for

Non-CREST Shareholders ...................................

11.00 a.m. on 1 April 2020

Expected date of announcement of results of the Rights Issue

through a Regulatory Information Service ....................

2 April 2020

Admission of, and dealings commence in, the New Shares, fully

paid, on the London Stock Exchange .........................

8.00 a.m. on 2 April 2020

New Shares credited to CREST stock accounts (for Qualifying

CREST Shareholders only

(3)

) .................................

as soon as practicable after 8.00

a.m. on 2 April 2020

Despatch of definitive share certificates for New Shares in certificated

form (to Qualifying Non-CREST Shareholders only)

(3)

and Premium

Payments (if applicable) of Nil Paid Rights not taken up .............

by no later than 16 April 2020

Despatch of Nominee Statements (to Qualifying AML Nominee Service

Shareholders only)

(3)

............................................

by no later than 24 April 2020

Notes:

(1) The times and dates set out in the expected timetable of principal events above and mentioned throughout this document,

by announcement through a Regulatory Information Services, and in the Provisional Allotment Letter may be adjusted by the

Company, in which event details of the new dates will be notified to the FCA and to the London Stock Exchange and, where

appropriate, to Shareholders.

(2) References to times in this document are to London time unless otherwise indicated.

(3) Subject to certain restrictions relating to Overseas Shareholders. See paragraph 2.5 of Part III - Terms and Conditions of the

Rights Issue.

DIRECTORS, COMPANY SECRETARY AND ADVISERS

Board of Directors

A list of the members of the Company’s Board as at the date of this document is set forth in the

table below.

Name Position

Penny Hughes, CBE ...................... Chair

Dr Andrew Palmer, CMG ................. President and Group Chief Executive Officer

Mark Wilson ............................ Chief Financial Officer and Executive Vice

President

Richard Solomons ....................... Senior Independent Non-Executive Director

Amr Ali Abdallah AbouelSeoud ........... Non-Executive Director

Lord Matthew Carrington ................ Independent Non-Executive Director

Mahmoud Samy Mohamed Aly El Sayed .... Non-Executive Director

Peter Espenhahn ........................ Independent Non-Executive Director

Dante Razzano ......................... Non-Executive Director

Imelda Walsh ........................... Independent Non-Executive Director

Professor Tensie Whelan ................. Independent Non-Executive Director

Following completion of the Capital Raise, Penny Hughes will step down as a Director and the

Chair, and Lawrence Stroll (the Proposed Director) will join the Board as Executive Chair,

effective on 7 April 2020.

Each of the Directors’ business address is, and the Proposed Director’s business address will be,

the Company’s registered office address at Banbury Road, Gaydon, Warwick CV35 0DB, United

Kingdom.

Telephone: +44 (0) 1926 644 644

Company Secretary: Catherine Sukmonowski

Registered Office: Banbury Road

Gaydon

Warwick CV35 0DB

United Kingdom

Sole Financial Adviser, Sponsor, Joint Global

Co-ordinator and Joint Bookrunner:

Morgan Stanley & Co. International plc

25 Cabot Square

London E14 4QA

United Kingdom

Joint Global Co-ordinators and Joint

Bookrunners:

Deutsche Bank AG, London Branch

Winchester House

1 Great Winchester Street

London EC2N 2DB

United Kingdom

J.P. Morgan Securities plc

25 Bank Street

Canary Wharf

London E14 5JP

United Kingdom

Auditors (from 2019): Ernst & Young LLP

Colmore Square

Birmingham B4 6HQ

United Kingdom

Auditors (prior to 2019): KPMG LLP

One Snowhill

Snow Hill Queensway

Birmingham B4 6GH

United Kingdom

Reporting Accountant: Ernst & Young LLP

Colmore Square

Birmingham B4 6HQ

United Kingdom

Legal advisers to the Company as to English and

US law:

Freshfields Bruckhaus Deringer LLP

65 Fleet Street

London EC4Y 1HS

United Kingdom

Legal advisers to the Sole Financial Adviser,

Sponsor, Joint Global Co-ordinators and Joint

Bookrunners as to English and US law:

Linklaters LLP

One Silk Street

London EC2Y 8HQ

United Kingdom

Registrar and Receiving Agent Equiniti Limited

Aspect House

Spencer Road

Lancing

West Sussex BN99 6DA

United Kingdom

PART I - LETTER FROM THE CHAIR OF ASTON MARTIN LAGONDA GLOBAL

HOLDINGS PLC

Directors:

Penny Hughes, CBE

Dr Andrew Palmer, CMG

Mark Wilson

Richard Solomons

Amr Ali Abdallah AbouelSeoud

Lord Matthew Carrington

Mahmoud Samy Mohamed Aly El Sayed

Peter Espenhahn

Dante Razzano

Imelda Walsh

Professor Tensie Whelan

Proposed Director:

Lawrence Stroll

Registered Office:

Banbury Road

Gaydon

Warwick CV35 0DB

United Kingdom

27 February 2020

To holders of Aston Martin Lagonda Global Holdings plc ordinary shares

Dear Shareholder

Proposed Placing of 45,600,577 Placing Shares at 400 pence

per Placing Share to the Yew Tree Consortium

Proposed 14 for 25 Rights Issue of 153,217,942 New Shares at 207 pence

per New Share

Notice of General Meeting

1. Introduction

On 31 January 2020, the Company announced its intention to raise £500 million by way of a

strategic investment of £182.4 million by a consortium led by Lawrence Stroll and a rights issue of

£317.2 million.

The purpose of this document is to explain the background to and reasons for the Capital Raise,

set out the terms and conditions of the Rights Issue and provide you with a Notice of General

Meeting to be held to consider and, if thought fit, to pass the Resolutions required to authorise

the Company to carry out the Capital Raise.

This document also explains why the Board considers that the Resolutions to be proposed at the

General Meeting are in the best interests of Shareholders and why the Board unanimously

recommends that Shareholders vote in favour of the Resolutions.

2. Background to and reasons for the Capital Raise

Background to the Capital Raise

2019 was a challenging year for Aston Martin Lagonda. As a result of weaker trading, the Group

was required to revise down guidance for 2019 versus the expectations set out at IPO and in

other announcements, first in July 2019 and again in January 2020. The Group’s liquidity position

has deteriorated significantly, which has prompted an operational and financial review of the

business. This has resulted in a revised business plan as announced on 31 January 2020 and

described more fully in this document. The Capital Raise is required for the Group to continue

operating as a going concern, to facilitate the successful execution of the reset of the business

plan and to provide a platform for the future success of Aston Martin Lagonda. The Capital Raise

is also required to ensure the Company can publish a clean viability statement covering the five-

year period to 31 December 2024 in its 2019 annual report to be published on or around 17

March 2020.

Second Century Plan and the IPO

At the time of the Company’s IPO in October 2018, the Group came to market with a growth

story centred on the successful execution of the Second Century Plan. The Second Century Plan

was initiated in 2015 with three distinct phases: (i) business stabilisation, (ii) core strengthening,

and (iii) expansion of its product portfolio, all aimed at delivering a successful and sustainable

luxury business. The Second Century Plan was underpinned by a product strategy to launch seven

new core models over seven years, with each model having a seven-year lifecycle. Given the

number of product launches taking place in quick succession, the Second Century Plan required

an elevated level of capital investment, with an aim to deliver operating leverage in the medium

term and to position the Group to capitalise on strong industry tailwinds in the HLS car market.

Phase 1 was completed in 2017, following the introduction of DB11 and the establishment of a

clear growth strategy which committed the group to additional investment in manufacturing to

realise the future product strategy. Phase 2 was substantially completed in 2018 with the launch

of the Vantage and DBS Superleggera, delivering a new range of Aston Martin sports cars. The

Group’s commitment to its special edition range was significant, including the development of a

hypercar, Valkyrie, in collaboration with Red Bull Racing. Phase 3 commenced with the expansion

of the Aston Martin portfolio into the SUV market with the Aston Martin DBX.

However, the Second Century Plan ultimately proved to be too ambitious against the

unexpectedly large downside risk of underperformance that the business has experienced. The

planned product cadence and requirement for new manufacturing facilities was too demanding

on the scale of investment and a balance sheet unable to withstand the Group’s trading

performance in 2019.

2019 Trading

As previously announced, the Group’s trading performance diminished throughout 2019,

resulting in lower sales, higher selling costs and lower margins versus expectations. The Group

started 2019 with elevated levels of company and dealer stocks, partially due to the supply chain

disruption at the end of 2018 but also as a result of the lower than expected demand for

Vantage and the lead-time required to adjust manufacturing and supply levels.

Consequently, achieving the retail sell through to start to de-stock the dealer network and

rebalance the Group’s supply levels required more retail and customer financing support than

planned, weighing on average selling price. Despite core retail dealer sales increasing by 12 per

cent. in 2019 year-on-year, this was not sufficiently high enough to support the Group’s

expectations of wholesale volumes. As a result of lower than planned wholesales in the first half

of 2019, the Group’s stock remained elevated at 30 June 2019 and the Group took steps to

reduce its outlook for the year accordingly. A further reduction in volumes in the second half of

2019 created an immediate need for liquidity, resulting in the issuance of the $150 million

12.0 per cent. senior secured split coupon notes due 2022 (the $150m 12.0% Notes due 2022).

Pressure on liquidity continued in the fourth quarter as revised targets were not met during the

Group’s largest selling season.

Whilst dealer stocks at 31 December 2019 were approximately 190 units lower than they were at

31 December 2018, they remain elevated and the Group is focused on repairing the balance

between demand and supply, to allow the Group to regain its price positioning.

Finally, costs were higher than planned due to a combination of incremental marketing

campaigns in December, particularly in the United States and in support of DBX launch activities,

alongside headcount and other selling, general and administrative costs falling short of savings

targets.

DB11 and DBS Superleggera have performed comparatively well and have grown market share in

recent years but have not been immune to the challenging trading conditions experienced in

2019. Despite gaining share in a declining segment, which was down a double-digit percentage

for the year, the Vantage underperformed versus the Group’s original expectations, particularly

in Europe and the United Kingdom.

The Group’s weakening trading performance led to successive downward revisions to the Group’s

previous 2019 guidance, first in July 2019 and again in January 2020.

As a result of the lower than expected cash generation from operations and considerable

investment in both product launches and the additional manufacturing facility at St. Athan, the

Group has in parallel experienced a deterioration in its liquidity position since the first quarter of

2019. This led to a requirement for the Group to raise additional debt to maintain liquidity. New

debt issuances in 2019 included the $190 million 6.5 per cent. senior secured notes due April 2022

(the $190m 6.5% Notes due 2022) in April 2019, the $150m 12.0% Notes due 2022 in October

2019 and a £38.7 million inventory repurchase arrangement (including £6.5 million of VAT) in

November 2019. This has resulted in a Net Debt position of £876.2 million and an Adjusted

Leverage Ratio of 7.3x as of 31 December 2019.

Operational and Financial Review

The Group conducted a comprehensive review of the business, and longer-term strategic options

in light of its 2019 operational and financial performance and a challenging HLS car market. The

review has been completed and the Board has agreed a series of actions to reset, stabilise and

de-risk the business and position the Group for controlled, long-term, profitable growth. The

resetting of the Second Century Plan includes the Capital Raise of £500 million, the rebalancing

of supply and demand dynamics, reduced capital expenditure and the re-phasing of some future

product launches, together with cost-efficiency initiatives.

The Group is focused on turning around performance, restoring price positioning and delivering

a more efficient operational footprint. The reset of the business plan includes a more

conservative view for sports car wholesales for 2020, particularly for Vantage, and in the medium

term the Group intends to manage sports car wholesales in order to maintain the appropriate

balance between supply and demand to regain a stronger order book and thus pricing power.

In addition, the Group will deliver new products this year with DBX, which was unveiled in

November 2019 with launch planned for the second quarter of 2020, the Vantage Roadster in the

spring and the Aston Martin Valkyrie in the second half of the year.

The Group has reviewed the timing of future product launches to control medium-term

investment requirements, improve cash generation and provide greater financial stability and

flexibility. The Group’s mid-engined core car (Vanquish) is now expected to be unveiled in 2023,

following the unveiling of Valhalla in 2022. Development of a fuel-efficient, modular V6 engine

with hybrid and plug-in capabilities continues, which will support the Group’s core cars being

available as hybrid and plug-in hybrid variants from the mid-2020s. The Lagonda brand will now

be relaunched no earlier than 2025 (previously 2022) and while development of Rapide E is

substantially complete, the programme has been paused pending a review (previously deliveries

had been expected to start in 2020).

Special editions continue to be a key component of the reset of the business plan, with the

following expected milestones:

• production of the Aston Martin Valkyrie is still expected to ramp up through the second

half of 2020;

• deliveries of the Goldfinger DB5 Continuations are due to start in 2020 as well as the

DBS GT Zagatos, which will complete the DBZ Centenary Collection;

• the V12 Speedster will be unveiled in 2020 with deliveries due to start in the first quarter

of 2021;

• the Aston Martin Valkyrie AMR Pro is still expected to be revealed in 2021;

• Valhalla is now expected to be unveiled in 2022; and

• new specials that have not yet been revealed will comprise the balance of one heritage

special edition and two contemporary special editions each year.

There have also been changes in the management of Sales, Marketing & Communications and

Engineering. Moreover, further to the significant reduction in contractors and a voluntary

redundancy and early retirement programme actioned in 2019 that led to an approximately 22

per cent. reduction in headcount year-on-year, additional reductions will be made to rebalance

the Group’s permanent and contractor headcount. At the same time, approximately 300 new

roles will be created at the St. Athan manufacturing facility in addition to the approximately 300

employees already at that site. The Group’s property footprint will also reduce alongside selling,

general and administrative cost reductions commensurate with the Group’s financial and

operational ambitions.

The Directors expect these changes to yield £10 million of annualised savings, with £7 million

delivered during 2020 after one-off costs, broadly offsetting expected cost increases due to the

opening of the new facility in St. Athan.

Major Shareholders

As at 21 February 2020 (being the latest practicable date prior to the publication of this

document), the Prestige/SEIG Shareholder Group owns 29.64 per cent. of the Group and the

Adeem/PW Shareholder Group (together with the Prestige/SEIG Shareholder Group, the Major

Shareholders) owns 27.59 per cent. of the Group. The Major Shareholders own 57.23 per cent. of

the Group in aggregate, and each currently have the right to appoint two Directors to the Board.

With the sad passing of Peter Rogers earlier this year, the Prestige/SEIG Shareholder Group is

currently represented by only one Director on the Board. The Major Shareholders have

irrevocably undertaken to vote in favour of the Capital Raise.

The Prestige/SEIG Shareholder Group has irrevocably undertaken to take up 100 per cent. of its

entitlements under the Rights Issue. The Adeem/PW Shareholder Group has agreed to sell such

number of Nil Paid Rights to the Yew Tree Consortium which will result in (i) the Adeem/PW

Shareholder Group taking up 38.9 per cent. of its entitlements under the Rights Issue and (ii) the

Yew Tree Consortium taking up the remainder of the Adeem/PW Shareholder Group’s

entitlements. Accordingly, 100 per cent. of the Adeem/PW Shareholder Group’s entitlements

under the Rights Issue will be taken up by the Adeem/PW Shareholder Group and the Yew Tree

Consortium. The Yew Tree Consortium has, in addition, irrevocably undertaken to take up

100 per cent. of its entitlements under the Rights Issue.

Mercedes-Benz AG, which owns 4.18 per cent. of the Company’s issued share capital as at

21 February 2020 (being the latest practicable date prior to the publication of this document),

has irrevocably undertaken to (i) vote in favour of the Placing and the Rights Issue and (ii) take

up 100 per cent. of its entitlements under the Rights Issue.

The Group has also received irrevocable undertakings from other Shareholders (which used to

form part of the Prestige/SEIG Shareholder Group) representing 3.16 per cent. of the Company’s

issued share capital to (i) vote in favour of the Placing and the Rights Issue and (ii) take up 100

per cent. of their entitlements under the Rights Issue.

Reasons for the Capital Raise

The operational and financial review has highlighted the immediate need for additional liquidity

to fund its short-term working capital needs, strengthen the balance sheet and ensure the Group

has a capital structure that will enable the Group to successfully deliver the reset of the business

plan.

Reset of the Business Plan

As noted above, the Group expects to launch DBX, Vantage Roadster and Valkyrie in 2020.

Production and delivery of these models are critical to managing the Group’s evolution towards

becoming a cash flow positive business.

Since the highly successful unveiling of DBX in November 2019, the order book has progressed

even better than expected, with approximately 1,800 orders from when it opened on

20 November 2019 to 7 January 2020, with approximately 1,200 of those orders being a

combination of customer orders and specifications in progress and approximately 600 dealer-

specified to maintain the successful launch of DBX including customer test cars, marketing cars

and showroom cars. The order book has continued to build, with total orders taken as at the

date of this document in excess of the planned DBX retail target for 2020. Given such strong

orders, the key focus of the Group is to ensure that full production and delivery of DBX remain

on schedule. The Group has an established record of starting production and delivering its cars

on time, and the Capital Raise will help to ensure the Group has sufficient cash flow to continue

operations through to the start of delivery of DBX, with an improving cash flow profile expected

thereafter.

Aston Martin is a well-known and well-established brand, and the Group has a clear pathway to

becoming a cash-generative business, but near-term liquidity support is required to ensure the

delivery of the 2020 pipeline and beyond. The Capital Raise is intended to support the future

success of the Group.

In addition to the near-term liquidity needs, the Group’s Adjusted Leverage Ratio of 7.3x as at

31 December 2019, with a Net Debt position of £876.2 million, is too high to support the business

in the medium and long terms. The Group has £829.9 million of financial debt maturing in April

2022. Therefore, ensuring that the Group’s balance sheet is improved ahead of the refinancing

process commencing is critical to ensure the capital structure can be extended and refinanced on

appropriate terms.

Improving the balance sheet through the Capital Raise will also allow the Group to adopt a more

demand-driven approach to inventory and pricing management, restoring pricing power and

thereby improving profitability in the short, medium and long terms, together with increasing

brand equity.

Benefits of the Yew Tree Consortium Investment

The strength of the Aston Martin Lagonda brand has been apparent with the significant interest

the Group received from a variety of potential strategic investors over the recent months. The

Board considered and discussed all proposals received prior to making the announcement on

31 January 2020 in relation to the proposed investment in the Group by the Yew Tree

Consortium led by Lawrence Stroll. The other members of the consortium are André Desmarais

(former CEO of Power Corp. Canada) and his family, Michael de Picciotto (Vice-Chairman of the

Supervisory Board of Engel & Volkërs AG), Silas Chou (the Hong Kong fashion sector investor),

John Idol (Chairman and CEO of Capri Holdings), Lord Anthony Bamford (Chairman of JCB) and

John McCaw (former part-owner of McCaw Cellular).

The following table sets forth the percentage investment in the Yew Tree Consortium by each

consortium member.

Lawrence Stroll (Yew Tree)

(1)

.............................. 86.4

John Idol ............................................... 4.25

Lord Anthony Bamford (J.C.B. Research) .................... 4.25

Michael de Picciotto (Saint James Invest SA) ................. 2.13

André Desmarais and his family (Francinvest Holding

Corporation) .......................................... 1.70

John McCaw (RRRR Investments LLC) ....................... 1.28

(1) Includes an indirect holding of 4.25% of the Yew Tree Consortium held by Silas Chou and certain members of his family.

The Board believes that the Yew Tree Consortium represents the most compelling proposition for

the Group. As announced on 31 January 2020, the Yew Tree Consortium will invest £182.4 million

by way of a placing of Shares representing 16.67 per cent. of the post-Placing issued share capital

of the Group. This will be followed by the Rights Issue to raise an additional £317.2 million.

In addition, in early February 2020 Yew Tree provided the Group with £55.5 million of short-term

working capital support, the financial terms of which are significantly more favourable than the

Delayed Draw Notes, in order to improve the liquidity of the Group immediately. It is intended

that these funds will be refunded upon completion of the Placing. For more detail, please see

paragraph 18.1.6 of part IX - Additional Information.

Subject to completion of the Capital Raise, Mr. Stroll will join the Board as Executive Chair,

effective on 7 April 2020. Mr. Stroll has a great deal of experience and success in building some

of the world’s most prominent luxury brands such as Tommy Hilfiger and Polo Ralph Lauren, and

notably led the IPO of Michael Kors which went on to enjoy further strong growth as a publicly

listed company. Mr. Stroll has also been for many years an active investor in the racing and luxury

car industry, historically including the Ferrari dealership in Quebec and Circuit Mont-Tremblant

and currently the Racing Point Formula 1

team.

In addition, the Group has entered into an agreement under which the Racing Point F1

team

will become the Aston Martin F1

team with effect from the 2021 season. This agreement is for

a 10-year initial term and the Group will receive an economic interest in the team. The

agreement also includes a sponsorship arrangement from 2021 and for the subsequent four years

with commercial terms commensurate with the Group’s current annual F1

expenditure,

renewable for five years, subject to satisfying certain conditions at the time.

For the 2020 F1

season the Group will continue with its proud sponsorship of the Red Bull

Racing F1

Team, and the technology partnership between the Group and Red Bull Advanced

Technologies will continue until the Aston Martin Valkyrie is delivered.

The Group’s medium-term leverage target is to be under 2.0x EBITDA, which the Board believes is

appropriate for the business. The Capital Raise would accelerate progress towards this target and

provide the Group’s customers, suppliers and stakeholders with confidence in the Group;

alleviating any immediate concerns relating to near-term liquidity.

3. Use of proceeds

The Capital Raise is expected to raise approximately £500 million in gross proceeds and

approximately £485 million in net proceeds, which the Group expects to use to improve liquidity,

finance the ramp-up in production of DBX and deliver the turnaround of the Company’s

performance. The Group will use a portion of the net proceeds of the Placing to refund the

£55.5 million of short-term working capital support provided by Yew Tree to the Group in early

February 2020 and between £70 million and £100 million to fund the working capital needs of

the business in the first half of 2020 to facilitate the delivery of DBX, Valkyrie and other special

editions in 2020. The remaining approximately £329.5 million to £359.5 million will be used for

general corporate purposes in support of the reset of the business plan.

4. Financial impact of the Capital Raise

Had the Capital Raise taken place as at the last balance sheet date, being 31 December 2019, the

effect on the balance sheet would have been an increase in cash and cash equivalents of

approximately £485 million.

Your attention is also drawn to Part VII – Unaudited Pro Forma Financial Information, which

contains an unaudited pro forma statement of net assets that illustrates the effect of the Capital

Raise on the Group’s net assets as at 31 December 2019 as if the Capital Raise had been

undertaken at that date.

5. Terms of the Placing, the Rights Issue and the New Shares

The Placing

The Placing comprises 45,600,577 Placing Shares (representing 19.99 per cent. of the Company’s

existing issued ordinary share capital). The Yew Tree Consortium will subscribe for, and the

Company will issue and allot to the Yew Tree Consortium, the Placing Shares at an issue price of

400 pence per Placing Share, and the Company will therefore raise £182.4 million (before

expenses). The Placing Shares will represent 16.67 per cent. of the Company’s issued ordinary

share capital immediately following completion of the Placing and prior to the Rights Issue.

The price at which the Placing Shares will be issued to the Yew Tree Consortium represents a

0.67 per cent. discount to the closing price of 402.7 pence per Share on 30 January 2020 (the last

Business Day before the Capital Raise was announced to the market). The price per Placing Share

is not directly connected to the Issue Price of the Rights Issue.

The Placing and the obligations of the Yew Tree Consortium to subscribe for the Placing Shares

are conditional on the Resolutions being duly passed at the General Meeting, Admission of the

Placing Shares occurring at or before 8.00 a.m. on 17 March 2020, none of the warranties or

undertakings in the Placing Agreement being breached and none of the warranties becoming

untrue, inaccurate or misleading. Assuming the Resolutions are passed, the Placing Shares will be

registered in the names of the members of the Yew Tree Consortium in accordance with their

respective placing allocations on the Record Date.

Applications will be made for the Placing Shares to be admitted to listing on the Official List and

to trading on the London Stock Exchange’s main market for listed securities. It is expected that

Admission of the Placing Shares will become effective and dealings in the Placing Shares will

commence at 8.00 a.m. on 17 March 2020.

The Placing Shares will, when issued and fully paid, rank pari passu in all respects with the

Existing Shares, including the right to receive all dividends or other distributions declared, made

or paid after the date of their issue. As a result, each of the members of the Yew Tree

Consortium will be eligible to participate in the Rights Issue, and the Yew Tree Consortium has

irrevocably undertaken to take up its rights in full in respect of the New Shares to which it is

entitled. In addition, the Yew Tree Consortium has agreed to purchase certain Nil Paid Rights

from the Adeem/PW Shareholder Group.

It is expected that the Yew Tree Consortium’s shareholding in the Company immediately

following the Rights Issue will represent approximately 21.71 per cent. of the Company’s issued

ordinary share capital.

Shareholders will experience a dilution of their shareholding in the Company of 16.67 per cent.

as a result of the Placing.

The Rights Issue and the New Shares

The Company is proposing to raise proceeds of £317.2 million (before expenses) pursuant to the

Rights Issue. The Rights Issue is being underwritten by the Underwriters (other than the New

Shares for which the Committed Shareholders have irrevocably undertaken to subscribe), subject

to certain customary conditions. The principal terms of the underwriting agreement are

summarised in paragraph 17.1 of Part IX - Additional Information.

The Company proposes to issue 153,217,942 New Shares in connection with the Rights Issue.

Subject to the fulfilment of, among other things, the conditions set out below, New Shares will

be offered to Qualifying Shareholders at an Issue Price of 207 pence per New Share, payable in

full on acceptance. The Rights Issue will be offered on the basis of:

14 New Shares at 207 pence per New Share for every 25 Existing Shares

held on the Record Date (and so in proportion for any other number of Existing Shares then held)

and otherwise on the terms and conditions as set out in this document and, in the case of

Qualifying Non-CREST Shareholders and Qualifying AML Nominee Service Shareholders also in

the Provisional Allotment Letters and the Forms of Instruction, respectively.

The Issue Price of 207 pence per New Share represents a discount of approximately 47 per cent.

to the closing price of 391 pence per Existing Share on 26 February 2020 (the last Business Day

before the publication of this document) and a discount of approximately 36 per cent. to the

theoretical ex-rights price of 325 pence per Share by reference to the closing price on the same

basis.

Entitlements to New Shares will be rounded down to the nearest whole number (or to zero) and

fractions of New Shares will not be allocated to Qualifying Non-CREST Shareholders or Qualifying

CREST Shareholders but will be aggregated and issued into the market for the benefit of the

Company. Holdings of Existing Shares in certificated and uncertificated form will be treated as

separate holdings for the purpose of calculating entitlements under the Rights Issue.

The Rights Issue is conditional, among other things, upon:

(i) the Underwriting Agreement having become unconditional in all respects save for the

condition relating to Admission of the New Shares, nil paid;

(ii) Admission of the New Shares, nil paid, becoming effective by not later than 8.00 a.m. on

18 March 2020 (or such later time and/or date as the Joint Global Co-ordinators and the

Company may agree); and

(iii) the passing of the Resolutions at the General Meeting without material amendment.

The Rights Issue will result in 153,217,942 New Shares being issued (representing approximately

56 per cent. of the expected issued share capital immediately following the Placing and 36 per

cent. of the enlarged issued share capital immediately following completion of the Capital Raise).

The New Shares, when issued and fully paid, will rank pari passu in all respects with the Existing

Shares, including the right to receive dividends or distributions made, paid or declared after the

date of issue of the New Shares. Application will be made to the FCA and to the London Stock

Exchange for the New Shares to be admitted to the premium listing segment of the Official List

and to trading on the main market of the London Stock Exchange. It is expected that Admission

of the New Shares will occur and that dealings in the New Shares (nil paid) on the London Stock

Exchange will commence at 8.00 a.m. on 2 April 2020.

Some questions and answers, together with details of further terms and conditions of the Rights

Issue, including the procedure for acceptance and payment and the procedure in respect of rights

not taken up, are set out in Part II and Part III of this document and where relevant will also be

set out in the Provisional Allotment Letter.

Overseas Shareholders should refer to paragraph 2.5 of Part III - Terms and Conditions of the

Rights Issue for further information on their ability to participate in the Rights Issue.

6. Intentions of the Directors

The Directors, who hold in aggregate 4,315,841 Existing Shares, representing approximately

1.89 per cent. of the Company’s existing issued ordinary share capital as at 21 February 2020

(being the last practicable date prior to the publication of this document), each intend to take up

their rights in full or in part in respect of the New Shares to which they are entitled or, where

their Shares are held in trust or with nominees, such Directors intend to recommend that such

rights be taken up in full or in part.

7. Current trading and prospects in respect of the Group

Since 1 January 2020, the Group has been trading in line with its revised budget and has

continued to focus on de-stocking the dealer network with low wholesales as expected in line

with its budget.

In addition, in early February 2020 Yew Tree provided the Group with £55.5 million of short-term

working capital support, the financial terms of which are significantly more favourable than the

Delayed Draw Notes, in order to improve the liquidity of the Group immediately. It is intended

that these funds will be refunded upon completion of the Placing. For more detail, please see

paragraph 18.1.6 in Part IX - Additional Information.

Going forward, 2020 is the year in which the business will be reset in order that it can start to

operate as a true luxury car brand. This process is absolutely necessary for the long term

performance and value of the Company.

The uncertainties and risks to the financial performance in 2020 will include:

• Sports car wholesales for 2020 are planned to be materially lower than in 2019 as the

Company focuses on further reducing dealer inventories to a luxury norm. The Company

is planning to control and align shipments to dealers with customer demand in order to

build a stronger order book and regain price positioning.

• DBX and Aston Martin Valkyrie are key launch programmes for the business. Both

currently remain on plan. At St. Athan the DBX production trial to test line and suppliers

at run-rate and to ensure that the final build quality meets required standards has

started. Initial deliveries are scheduled for summer 2020, subject to any COVID-19 impact

on the supply chain and completion of quality maturation. Management will be fully

focused on overseeing the delivery of these programmes.

• Adjusted EBITDA in 2020 is expected to be almost entirely weighted in the second half of

the year due to initial deliveries of DBX and special editions and as first half revenue is

expected to decline as wholesales are managed. The final outcome for the year will

depend significantly on the successful execution of model roll-outs and special editions in

the second half. The Directors expect operational cost savings to yield £10 million of

annualised savings, with £7 million delivered during 2020 after one-off costs, broadly

offsetting expected cost increases due to the opening of the new facility in St. Athan.

• In light of the ongoing evolution of COVID-19, the primary concern remains the health

and safety of colleagues and their families, business partners and the local communities

and the Company continues to provide all the support possible. Public health measures

advised by governments are being followed in support of their efforts to contain the

spread of the virus.

• COVID-19 has the potential to impact both the supply chain and customer demand in

China and other markets. China was the Company’s fastest growing market in 2019 and

represented nine per cent. of total wholesales. None of the Company’s tier 1 suppliers

manufactures in China. The supply chain is being proactively managed in China and other

markets. Despite some disruption to supply of some components from China there has

been no impact on production. Supply is secured until at least the end of March.

Capital expenditure in 2020 is expected to be approximately £285 million in 2020, with

approximately half of this investment in the first quarter and two-thirds in the first half,

reflecting final St. Athan and DBX development costs. Depreciation and amortisation is expected

to be approximately £220 million and net interest approximately £90 million (income statement

charge assuming current exchange rates prevail for 2020). Working capital outflow of about £100

million is expected for 2020. In the first half of 2020, up to £100 million of incremental inventory

for DBX is expected to be partially offset by receivables unwind and deposit inflows.

The Company’s focus is on the successful completion of the Placing and Rights Issue and the

delivery of key model roll out milestones. The Company will continue to update its guidance to

the market as the year progresses. The Company confirms its belief in the longer-term

opportunity for significant growth and recovery of margins in order to achieve a path to a cash

generative, global luxury car brand through the resetting of the business during 2020.

8. Dividends and dividend policy

The Group is focused on improving its liquidity position, strengthening its balance sheet and

successfully executing the reset of the business plan. It is therefore the Directors’ intention during

the current phase of the Group’s development to retain the Group’s cash flow to achieve these

objectives. The Directors intend to review, on an ongoing basis, the Company’s dividend policy

and will consider the payment of dividends as the Group’s strategy matures, depending upon the

Group’s free cash flow, financial condition, future prospects and any other factors deemed by the

Directors to be relevant at the time.

9. General Meeting and Resolutions

You will find set out at the end of this document a notice convening a general meeting of the

Company to be held at 10.00 a.m. on 16 March 2020 at Freshfields Bruckhaus Deringer LLP, 65

Fleet Street, London EC4Y 1HT, United Kingdom. This general meeting is being held for the

purpose of considering and, if thought fit, passing the Resolutions. A summary and explanation

of the Resolutions is set out below, but please note that this does not contain the full text of the

Resolutions and you should read this section in conjunction with the Resolutions in the Notice of

General Meeting at the end of this document.

Two of the Resolutions are ordinary resolutions authorising the Board to (i) implement the

Placing and allot the Placing Shares and (ii) implement the Rights Issue and allot the New Shares.

The ordinary resolutions will pass if more than a 50 per cent. majority of the votes cast (either in

person or by proxy) vote in favour of each. These Resolutions are required because the Company

currently does not have the authority to allot Shares.

Two of the Resolutions are special resolutions to (i) disapply pre-emption rights in connection

with the Placing and (ii) disapply pre-emption rights in connection with the Rights Issue. The

special resolutions will pass if more than 75 per cent. majority of the votes cast (either in person

or by proxy) vote in favour of each. The Companies Act and the Listing Rules allow for the

disapplication of pre-emption rights which may be waived by a special resolution of

Shareholders, either generally or specifically, for a maximum period not exceeding five years.

Disapplication of pre-emption rights allows the Board to impose any limits or restrictions and

make any arrangements which they consider necessary or appropriate to deal with fractional

entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any

territory or any other matter.

Each of the Resolutions is conditional on all of the other Resolutions being passed.

10. Overseas Shareholders

The attention of Shareholders who have registered addresses outside the United Kingdom, or

who are citizens or residents of countries other than the United Kingdom, or who are holding

Shares for the benefit of such persons (including, without limitation, custodians, nominees,

trustees and agents) or who have a contractual or other legal obligation to forward this

document, a Provisional Allotment Letter and any other document in relation to the Rights Issue

to such persons, is drawn to the information which appears in paragraph 2.5 of Part III - Terms

and Conditions of the Rights Issue.

New Shares will be provisionally allotted (nil paid) to all Shareholders on the register on the

Record Date, including Overseas Shareholders. However, Provisional Allotment Letters will not be

sent to Shareholders with registered addresses, or who are resident or located, in an Excluded

Territory or, subject to certain exceptions, the United States, nor will the CREST stock account of

Shareholders with registered addresses, or who are resident or located, in an Excluded Territory,

or, subject to certain exceptions, the United States, be credited with Nil Paid Rights. Any person

with a registered address, or who is resident or located, in the United States or an Excluded

Territory who obtains a copy of this document or a Provisional Allotment Letter is required to

disregard them, except with the consent of the Company.

Notwithstanding any other provision of this document or the Provisional Allotment Letter, the

terms of the Rights Issue relating to Overseas Shareholders may be waived, varied or modified as

regards specific Shareholders or on a general basis by the Company in its absolute discretion.

In addition, Overseas Shareholders should consult their professional advisers as to whether they

require any governmental or other consents or need to observe any other formalities to enable

them to take up their entitlements to the Rights Issue.

11. Taxation

Your attention is drawn to Part VIII – Taxation. If you are in any doubt as to your tax position,

you should consult your own professional adviser without delay.

12. Share-Based Incentive Plans

The remuneration committee is currently considering the impact of the Capital Raise on

outstanding awards under the LTIP. While the remuneration committee has the power to adjust

the number of Shares under awards, it does not currently anticipate using this power. The

remuneration committee may amend the performance conditions to ensure performance is

measured on a like-for-like basis before and after the Capital Raise. No decision has been take at

this time as to whether to adjust performance conditions and this matter will be considered

further during 2020. If the remuneration committee decides any adjustments would be

appropriate, those would be set out in the 2020 Directors’ Remuneration Report to be included

in the Company’s 2020 annual report.

In respect of the Shares held by the Executive Directors under the legacy IPO LTIP, each of the

Directors will instruct the nominee who holds the shares on their behalf to sell sufficient Nil Paid

Rights to enable the nominee to take up the balance of the rights. The resulting Shares will be

released in three equal tranches on the second, third and fourth anniversary of IPO (being the

relevant release dates under the legacy IPO LTIP).

13. Actions to be taken

Shareholders will find enclosed with this document a Form of Proxy or, in the case of Qualifying

AML Nominee Service Shareholders, a Voting Instruction Form, for use at the General Meeting.

You are requested to complete and sign the Form of Proxy or Voting Instruction Form whether or

not you propose to attend the General Meeting in person in accordance with the instructions

printed on it so as to be received by the Registrar, Equiniti Limited, at the return address on the

enclosed Form of Proxy, as soon as possible, and in any event no later than 10.00 a.m. on

12 March 2020 in the case of Forms of Proxy, and 10.00 a.m. on 11 March 2020 in the case of

Forms of Instruction.

If you hold Existing Shares in CREST, you may appoint a proxy by completing and transmitting a

CREST Proxy Instruction in accordance with the procedures set out in the Notice of General Meeting

at the end of this document on page 385. The completion and return of a Form of Proxy (or the

electronic appointment of a proxy) will not preclude you from attending and voting in person at

the General Meeting or any adjournment thereof, if you wish to do so and are so entitled.

If you are a Qualifying Non-CREST Shareholder, a Provisional Allotment Letter will be dispatched

to you giving you details of your Nil Paid Rights by post on or about 17 March 2020. If you are a

Qualifying AML Nominee Service Shareholder, a Form of Instruction will be dispatched to you

giving you details of your Nil Paid Rights by post on or about 17 March 2020. If you are a

Qualifying CREST Shareholder, you will not be sent a Provisional Allotment Letter or a Form of

Instruction. Instead, you will receive a credit to your appropriate stock accounts in CREST in

respect of Nil Paid Rights, which it is expected will take place as soon as practicable after

8.00 a.m. on 18 March 2020. Such crediting does not in itself constitute an offer of New Shares.

If you sell or have sold or otherwise transferred all of your Shares held (other than ex-rights) in

certificated form before 8.00 a.m. on 18 March 2020, please forward this document and any

Provisional Allotment Letter, if and when received, at once to the purchaser or transferee or the

bank, stockbroker or other agent through whom the sale or transfer was effected for delivery to

the purchaser or transferee, except that such documents should not be sent to any jurisdiction

where to do so might constitute a violation of local securities laws or regulations, including, but

not limited to, the United States and the Excluded Territories.

If you sell or have sold or otherwise transferred only part of your holding of Existing Shares

(other than ex-rights) held in certificated form before the Ex-Rights Date, you should refer to the

instruction regarding split applications in Part III - Terms and Conditions of the Rights Issue of this

document and in the Provisional Allotment Letter.

If you sell or have sold or otherwise transferred all or some of your Shares (other than ex-rights)

held in uncertificated form before the Ex-Rights Date, a claim transaction will automatically be

generated by Euroclear which, on settlement, will transfer the appropriate number of Nil Paid

Rights to the purchaser or transferee.

The latest time and date for acceptance and payment in full in respect of the Rights Issue is

expected to be 11.00 a.m. on 1 April 2020, unless otherwise announced by the Company. The

procedure for acceptance and payment is set out in Part III - Terms and Conditions of the Rights

Issue of this document and, if applicable, in the Provisional Allotment Letter.

For Qualifying Non-CREST Shareholders who take up their rights in the Rights Issue, the New

Shares will be issued in certificated form and will be represented by definitive share certificates,

which are expected to be despatched by no later than 16 April 2020 to the registered address of

the person(s) entitled to them.

For Qualifying AML Nominee Service Shareholders who take up their rights in the Rights Issue, the

New Shares will be issued to the nominee and Equiniti Financial Services Limited will issue Nominee

Statements to confirm the number of Shares received under the Rights Issue and the new balance

held on behalf of such shareholders at that date, which are expected to be despatched by no later

than 24 April 2020 to the registered address of the person(s) entitled to them.

For Qualifying CREST Shareholders who take up their rights, the Receiving Agent will instruct

CREST to credit the stock accounts of the Qualifying CREST Shareholders with their entitlements

to New Shares. It is expected that this will take place as soon as practicable after 8.00 a.m. on

2 April 2020.

Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST

sponsor regarding the action to be taken in connection with this document and the Rights Issue.

If you are in any doubt as to the action you should take, you should immediately seek your own

financial advice from your stockbroker, bank manager, solicitor, accountant or other

independent financial adviser authorised under the FSMA or, if you are outside the United

Kingdom, by another appropriately authorised independent financial adviser.

14. Special Dealing Service

The Company has engaged Equiniti Financial Services Limited to make available the Special

Dealing Service in order for Qualifying Non-CREST Shareholders (who are private individuals and

whose registered addresses are in the United Kingdom or any other jurisdiction in the EEA) to sell

all of the Nil Paid Rights to which they are entitled or to effect a Cashless Take-up should they

wish. Further information about the Special Dealing Service is set out in paragraph 2.1.5 of Part

III - Terms and Conditions of the Rights Issue of this document and the Special Dealing Service

Terms and Conditions will be posted to Qualifying Non-CREST Shareholders together with the

Provisional Allotment Letters.

15. Further information

Your attention is drawn to the further information set out in Part II - Some Questions and

Answers about the Rights Issue and the Placing to Part X – Definitions and Glossary (inclusive) of

this document. Shareholders should read the whole of this document and not rely solely on the

information set out in this letter. In addition, you should consider the Risk Factors starting on

page 8 of this document.

16. Importance of your vote

Your attention is again drawn to the fact that the Capital Raise is conditional and dependent

upon, amongst other things, the Resolutions, all of which are inter-conditional, being passed at

the General Meeting.

If the Resolutions are not passed and the Capital Raise does not proceed:

• The Group will be unable to fund its short-term working capital needs required for the

reset of the business plan; consequently

• The Board will be required to take immediate restructuring action and cease near-term

investment.

• Despite the restructuring action, the Group may not be considered a ‘going concern’, and

may not receive a clean viability statement from its auditors.

• As a result of the above, the Company and key trading companies in the Group could enter

into administration or liquidation shortly thereafter, which could be as early as the next six

months.

Shareholders are therefore asked to vote in favour of the Resolutions at the General Meeting in

order for the Capital Raise to proceed. The Directors believe that, in addition to alleviating the

severe concerns regarding near-term liquidity and avoiding the refinancing difficulties described

below, the successful completion of the Capital Raise will significantly strengthen the Group’s

balance sheet and will enable the Group to make planned investments to deliver the reset of the

business plan and to realise essential opportunities for future growth.

The Group’s diminished trading performance in 2019, together with the need to fund ongoing

product development capital expenditure, a ramp-up in DBX production capabilities ahead of

delivery commencing on schedule in the second quarter of 2020, working capital and debt service

requirements are expected to generate an even more acute liquidity shortfall in the middle of

2020.

If the Capital Raise does not proceed, increasing awareness of the Group’s challenged financial

situation could lead to an increase in customer and supplier concerns around the Group’s

continued viability. This could prompt weakened credit terms with suppliers, which could cause a

significant cash outflow. As at 31 December 2019, trade creditors for the Group were

£138.5 million, so a reduction in settlement times would result in material incremental working

capital pressure and consequent funding requirements, with no certainty that they could be met.

Improving the balance sheet through the Capital Raise will also allow the Group to adopt a more

demand-driven approach to inventory and pricing management, restoring pricing power and

thereby improving profitability in the short, medium and long terms, together with increasing

brand equity.

Lower than expected cash generation from operations and considerable investment in both

product launches and the additional manufacturing facility at St. Athan has led to a requirement

for the Group to raise additional debt in recent months. New debt issuances in 2019 included the

$190m 6.5% Notes due 2022 in April 2019, the $150m 12.0% Notes due 2022 in October 2019 and

a £38.7 million inventory repurchase arrangement (including £6.5 million of VAT) in November

2019. This has resulted in a Net Debt position of £876.2 million and an Adjusted Leverage Ratio

of 7.3x as of 31 December 2019. With £829.9 million of the Group’s financial debt maturing in

April 2022, the Group’s balance sheet must be improved ahead of the refinancing process

commencing to facilitate a capital structure with appropriate financing terms.

However, if the Resolutions are not passed and the Capital Raise therefore does not proceed, the

Company will not receive the proposed net proceeds of the Capital Raise and will have an

immediate liquidity shortfall and be unable to fund its short-term working capital needs required

for the reset of the business plan. In this scenario, the Group would put in place an action plan to

mitigate the immediate working capital shortfall, which would first involve extending the period

of payments to various suppliers, together with ceasing all near-term discretionary investment in

vehicle development.

The mitigating actions would lead to faster sales decay profiles of current models, as well as

reduced performance, delays to, or the outright cancellation of, one or more future model

programmes, which the Directors believe is not a credible option should the Group wish to

continue trading. If the Group were forced to cancel any orders for which customers have prepaid a

deposit, the Group would be liable to return the deposits in respect of those cancelled orders. As of

31 December 2019, the Group held £78.5 million of refundable customer deposits and advances.

Despite these changes to the business plan, the Company and key trading companies in the Group

could still be required to enter into administration or liquidation shortly thereafter.

In addition, the Group would need to seek alternative financing arrangements. The Group has

the option, on or prior to 15 July 2020, to draw an additional $100 million under the Delayed

Draw Notes. However, the Delayed Draw Notes alone would not be sufficient to cover the

immediate liquidity shortfall and would lead to the further deterioration of the Group’s financial

position given the punitive interest cost.