Ford Get Income $850 Million in Aston Martin Sale

Ford Motor Co., seeking to raise cash after last year's record loss, will sell its profitable Aston Martin luxury sports-car unit for as much as $850 million to investors led by U.K. auto-racing champion David Richards, a person familiar with the transaction said.

Richards, founder of Prodrive Ltd., a U.K.-based maker of race-car parts, will be joined in the investment by Adeem Investment KSC and Investment Dar Co., two Kuwait-based Islamic investment companies, Adeem Chief Executive Officer Mustafa al- Saleh said in an interview yesterday.

Ford will make an ``important'' announcement concerning Aston Martin at 1:00 p.m. London time today, the company said in an e- mailed statement. Aston Martin, with price tags starting at $110,000 for the Vantage coupe, accounts for less than 1 percent of Ford's global sales volume.

``They do need the cash desperately,'' said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan. ``A niche product like Aston Martin is a diversion from the task at hand.''

The sale ends a six-month search for a buyer and two decades of Ford control of U.K.-based Aston Martin, best known as James Bond's preferred car. Ford bought its initial stake while on its way to posting a then-record 1987 profit. The Dearborn, Michigan, automaker lost $12.7 billion last year, the most in its 103-year history.

Ford spokesman Oscar Suris and Aston Martin Chief Executive Officer Ulrich Bez declined to comment. Investment Dar spokesman Naji Soweidan said ``nothing is finalized yet'' when contacted by Bloomberg yesterday.

The U.K. Sunday Times reported Ford will retain a 15 percent stake in Aston Martin.

Part of Premier

Aston Martin is part of Ford's Premier Automotive Group of European luxury brands, which had a $327 million pretax loss last year mainly because of another U.K.-based unit, Jaguar.

Aston Martin, with price tags starting at $110,000 for the Vantage coupe, accounts for less than 1 percent of Ford's global sales volume.

Ford, the world's third-largest automaker, bought a 75 percent stake in the Gaydon carmaker 20 years ago and the rest in 1994. The unit's cars started appearing in James Bond movies with 1964's ``Goldfinger'' and most recently in last year's ``Casino Royale.''

Ford put Aston Martin up for sale on Aug. 31, just before the company hired former Boeing Co. executive Alan Mulally as its new chief executive.

History

Founded as Bamford and Martin Ltd. in 1913, the company took the name Aston Martin a year later, after its cars had success in a competition known as the Aston Hill Climb, according to the carmaker's Web site.

After industrialist David Brown took over the company in 1947, his initials became part of several model names, including the Aston Martin DB5, made famous in the 1964 James Bond film ``Goldfinger.''

Aston Martin built just 16,000 cars in its first 88 years, according to Edmunds.com. Under Ford, Aston Martin's production has risen from 46 in 1992 to about 6,500 in 2006. Ford has said the unit is profitable, without providing figures.

The car gained worldwide fame when author Ian Fleming placed British secret agent Bond behind the wheel.

Agent 007 drove an Aston Martin DB Mark III in Fleming's 1959 ``Goldfinger'' novel about a plot targeting the gold reserves at Fort Knox. In the book, Bond's car had modest modifications, including reinforced bumpers for ramming other vehicles and a hidden compartment for weapons.

Movie Version

By the time the screen version was made five years later, the centerpiece was an Aston Martin DB5 with an ejector seat, machine guns and tire-slashers.

Aston Martins appeared sporadically in other Bond movies, including 1965's ``Thunderball.'' That film also had a cameo by Ford's then-CEO, Henry Ford II.

Aston Martin is the smallest-volume brand in the Premier Group, which includes Land Rover and Volvo in addition to Jaguar. Ford said in 2002 that the group would generate one-third of its automotive profit in five years. It hasn't come close.

Ford's biggest losses stem from its North American automotive unit, its largest. The company is closing plants and cutting jobs. Part of the automaker's cash drain stems from funding that restructuring plan.

Ford last year borrowed $23.4 billion to prepare for what it expects to be a $17 billion cash drain through 2009.

Ford shares have fallen 4.1 percent since Aug. 30, the day before Aston Martin was put on the sales block, to $7.93 on March 9 in New York Stock Exchange composite trading.

Ford's 7.45 percent bond due in July 2031 fell a quarter cent on the dollar to $80.5 cents on the dollar on March 9, according to Trace, the bond-price reporting system of the NASD. The yield rose to 9.52 percent.

source:www.bloomberg.com