Aston Martin to Get Cash Infusion from British Equity Firm

London-based private equity firm Investindustrial has agreed to invest 150 million ($242 million) in Aston Martin Lagonda Ltd. in exchange for a 37.5% stake in the British maker of luxury sports cars.

The deal will bring Aston Martin a badly needed cash injection to its 500 million ($805 million), five-year product development program and keep current operations afloat.

Moody's Investors Service noted last week that the carmaker burned through 27 million ($43 million) in cash during the third quarter, leaving it with less than 25 million in liquidity on Sept. 30.

Investindustrial's stake will come from a capital increase, probably the issuance of new shares. Kuwait's Investment Dar whose debt problems have prevented it from injecting more capital into Aston Martin will remain the carmaker's largest investor. The Kuwaiti firm led the consortium that bought the British boutique brand from Ford Motor Co. in 2007.

Investindustrial owned Ducati Motor Holding SpA from 2005 until July, when it sold the performance motorcycle maker to Volkswagen AG's Audi unit. Investindustrial says it aims to rejuvenate Aston Martin as it did Ducati: by expanding the model range and strengthening the dealer network.

To obtain the Aston Martin stake, the private equity firm prevailed over Indian SUV maker Mahindra & Mahindra Ltd. Aston Martin says choosing a financial investor over an industrial partner gives it greater flexibility to work with other engine and technology suppliers.

Investindustrial reportedly has promised to work with AMG the performance unit of Daimler AG's Mercedes-Benz Cars unit on technology and components for future Aston Martin models.