Aston Martin May Breach Bank Covenants
By Zack Newmark
January 19, 2009 10:49 PM
Filed Under: Corporate/Financial, European, Industry, Jaguar
Aston Martin may violate terms of their banking deals later this year, according to the company's chairman. Aston head David Richards said that although the company has no imminent financial troubles, they may technically breach their bank covenants.
Breaching a loan covenant could be considered a default, triggering a bank's right to demand the full and immediate payment of a loan. If Aston Martin cannot afford the bill, they could declare bankruptcy. Some common terms included in a loan could dictate the company's liquidity and its profitability.
Richards says the current financial crisis is to blame for the situation. Despite saying Aston Martin can weather the storm, Richards' company cut 600 jobs and slowed down manufacturing to match a much decreased demand. Research and development has also been stalled at the firm.
A group of investors, backed by financiers in Kuwait, purchased Aston Martin from Ford for £479 million in 2007. The current situation means the investment team may have to pump more cash in the business to keep it afloat. This comes at a bad time for one of the backers, Investment Dar, which says they need £680 million to refinance short-term debt.
Investment Dar executive vice-president Amr Abou El-Seoud is considering selling up to 20% of the British automaker.
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ever heard of the mclaren F1? had a bmw engine - a 6.1L V12 roughly derived from two E36 M3 engines. and it had roundabout 680hp. a decade ago. and they made a car that held the title of world's fastest production car for.. 7 years? and fastest 0-62 for even longer. bmw can make perfectly fine engines.
as for the finesse.. i think dbehmoaras might have been talking about driving finesse, not construction finesse. bmws drive with a.. for lack of a synonym, finesse that mercedes just can't match, and mercedes have a capability for luxury that bmw just can't match. if you want a comfortable, relaxing car, buy a merc. if you want a car that's just plain fun to drive, buy a bmw. it's that simple.
i think bmw would be a better match for aston - a high-revving V10 like the one from the outgoing M5/M6 seems to suit - simple and easy to handle (if you skip the SMG box) at low revs, but put the boot in and at the high revs you get a proper kick.
i've an.. unusual thought. what would happen if mercedes and bmw worked together on the next aston? if they pulled it off, you'd have the comfort and luxury of the oldest brand in the business, with the sheer excitement and driving pleasure of a high-revving, lightweight bmw. coupled with the aston badge and their gorgeous styling, you'd have one hell of a good car.. possibly the, dare i say it, perfect car, price notwithstanding
yes just imagine how many perfect engines is there just waiting to power a beautiful Aston! Oh and yes AM and Merc are also in similar price range (top models over several hundred €€€), so in a range with Lambo, Ferrari, Porsche, RR, Bentley, Bugatti, Maybach etc. That means several levels over BMW price range (max. to about 100 000€) where are also other like Audi, VW, Jaguar, Lexus etc. which is not bad, but no way that some of those carmakers could give a pedigree to such an mark like Aston is!
Please try and keep independent!
And that is just NA versions (like BMW) so that means the high-rev engine teritory of BMW is not owned by them, but by Merc!!!
And this engine was so good (unlike BMW engine for Mclaren F1) that was easily good for turbocharging, and here we have Lotec Sirius V12 Biturbo with 1336hp!!! there were numerous versions with 1200hp!
And that engines V12 comming from Merc have reputation of being reliable, not like BMW which has the most unreliable V12 ever produced, not because of bad engineering, but because they were hurrying with production and just glued together two normal inline-6!!! and that was the cancer of their V12...still known that they are problematic!!!
And even if McLaren F1 has it I don`t care!
And Aston Martin need powerful torquey engines, which can move heavy future big coupes and sedans from Aston! that means a powerful V12 TT (which BMW doesn`t have) and other big displacement engines (whic BMW again lacks against Merc)!!! Ohh and yes BMW doesn`t have any transmission which is good enough!!!! not even a one good!!! If BMW would have Aston it than be better to Aston to stay with engines they have now cos BMW has nothing to offer!!! M5/M6 engine cannot propell Aston DBS faster than Fords V12 525hp already can!
BMW is best in range to 30k € if you are buying normal sedane with 2-litre 4cylinder car for family (and even there gets riped by Audi and others), in a supercar teritory BMW doesn`t have to be, and it will never be!
Have a nice day
and before you go reminding us all of just how much power can be forced out of an engine, remember, the most powerful engine ever built by mercedes benz/amg was, i believe, the V12 in the sl65 black? 680 hp in a 6.0L biturbo V12 -- bmw/mclaren managed that a decade ago, without the turbos, in a road-legal, non-aftermarket car. the clk-gtr-amg, with only MB and AMG working on it, managed 630hp. i believe it was... illinor? that brought 700+hp out of that engine.
if we are going to talk about aftermarket engines, i've seen supras with over 2000bhp at the wheels on dynos. they're what, half the size of mercedes behemoth V12s? if you want aftermarket tuning power, go japanese, not german.
back to the actual debate about mercedes vs bmw as future astons, a heavy AMG engine in a big aston effectively gives you a bentley GT - a big, heavy engine in a big, heavy coupe. a light engine, however, would lighten the car considerably, making astons a properly nice drive through twists and bends instead of straight line speed. while this may not be as economically advantageous as a mercedes partnership, it would create what are arguably better cars.
as for astons in the future being heavy, i would say that in the future they would be lighter. cars from all automakers are getting lighter as technology improves, so i can only see aston's cars getting lighter and lighter too, furthering the push for lightweight engines, not enormous torque.
and merc don't have especially superb gearboxes in their road cars - they have one which is capable of handling the enormous power of that biturbo V12, which is one more than bmw certainly, but it's an automatic -- they'd definitely need to develop a manual box capable of handling the power before they put it in an aston.
and as for bmw not having anything to offer, nothing's stopping them from building a new engine. they did it for mclaren, and look where it got them - what is acknowledged as one of the greatest cars ever to be built. again, not as profitable as a merc agreement, but again, it would probably produce a better car, hypothetically.
oh and i'm sure that M5/M6 engine would do a better job than the ford V12 - 5% less power and probably at least 30% less weight, if not more.
and please, calm down -- i don't like being shouted at during a reasonable debate, which 8 exclamation marks kind of implies..
@swifthead: You really are ignorant if you think that horsepower is what makes a car good. Of the big 3 (audi, merc, and bmw), bmw really is the best driver, which is a very hard thing for me to say, with an a8 and s4 in my garage (don't ask why, I just love audi). Having test-driven many models of all three, including the m5 (which i recently just leased for the reason I'm about to say), rs6 (2005) and current s6 (at a promotional thing in a mall in miami), and the e63 (an old friend has one), the m5 was the best all around drive. The m5 felt like it was made for the track which was what really sold me. The s6 was very good (felt like a 2005 rs6 with tighter handling), but there was just not enough pickup (waiting for the rs6 to become U.S. legal, if it happens ahem...). The e63 was also good, but of the 3 it was the worst because even though it had the smoothest ride (what with slightly looser shocks and suspension, on the one I tested anyway), it suffered in agility around turns and as a result I was not confident that the car would really stick to the road which prevented me from flooring it around turns, which was very much unlike the m5, which felt like it was on rails (in a good way). For the type of car that I wanted, the e63 didn't cut it. But more importantly, the m5 has the 6-speed manual. The fact that the e63, with all that power and torque, does not come with a 6-speed manual not only angers me as a car enthusiast, but it also tells me something: that BMW is more about the drive whereas Mercedes is more about the ride. You can put any amount of horsepower and torque in car, but it's not everything (remember the VW gti w12-650?), but that's not what ultimately comes down to it. There's more to cars than a 1000hp, 1000lb-ft strapped to a piece of metal. That's where Aston Martin comes in: Aston isn't craving a fast 0-60 time because it doesn't want to ruin its image with a bunch of front-runners like Merc. BMW is the same way: that's why you see pop-culture infested with s600's and sl's rather than 7's and db9's. Game, set, and match.
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