Aston Martin's Last Stand

• UK carmaker set to unveil the new DBX model in China today
• Company raised bonds worth $150 million at 12% in September

In the 2006 James Bond movie Casino Royale, the British secret agent famously gambles it all in one final game of poker. His loss would have costed him his job and the British taxpayers millions.

He obviously wins it all before driving away in a spotless Aston Martin.

The makers of Bond's car would be hoping for a similar fate today in Beijing after unveiling their latest DBX model. A lot depends on the car priced at £158,000. If it doesn't sell enough, it could very well mean the end of fund raising for the British luxury car brand.

In September the company raised $150 million in senior secured bonds at a high interest of 12% to "strengthen its liquidity." As a condition to raise a further $100 million at the same rate, Aston Martin needs to receive 1,400 orders of the DBX Model cars in the next 8 months. The luxury car maker had sold a total of 6,441 cars across all models in the whole of 2018.

The year following its IPO launch in September 2018 has not been an easy ride for the sports car maker. Aston Martin's shares have fallen an astounding 75% since then. The biggest drop was after a "disappointing" revision in July this year, which saw the company reduce its expected sales by almost a thousand cars. Since then, the company has also reported £92 million in pre-tax losses for the first nine months of 2019.

The September bond sale was Aston Martin's second round of major fund raising this year. However, the company will only use 40% of these funds to invest in the company. The majority of these funds will be used to repay earlier borrowings. The repayment is modest compared to the net debt of the company, which stood at £800 million at the end of the last quarter.

According to the credit rating agency S&P, following the bond sale the company has reached "the ceiling" when it comes to sustainably servicing its debt. Although the company blamed "challenging external environment" and "macro-economic uncertainties" in its July trading statement for the poor financial year, early red flags of financial stress could be seen in its 2018 IPO prospectus.

Firstly, Aston Martin did not raise any money for investment in the company when it listed 27.5 percent of the company on the London Stock Exchange (LSE) for £1.19 billion. The main objective for going public was for it to explore an option of raising funds in the future and to retain its existing staff. The whole exercise of listing its shares on LSE costed the company £136 million or roughly 12% of the company's 2018 revenue.

Secondly, Aston Martin was already heavily indebted at the time of going public. The net debt of £538.8 million at the time towered over the operating profit of £64.4 million for the year.

According to Jane Fuller of Fuller Analysis, "the company had increasing obligations on its books. They were borrowing more without a track record of generating profits on the operating level."

Finally, Aston Martin's capital expenditure of £152 million was a third of its revenue in its 2018 IPO prospectus, where many of its ambitions were listed. It included Aston Martin's pledge to become the "world's first all-electric luxury" car company by investing in its electric car venture Lagonda. The company also reported its plans to fund its facility in Wales, for the production of its latest DBX model which went on sale today.

Following its listing in 2018, the first British car company to be listed in the past 30 years has been on a neutral gear down a steep hill. A lot can change if the DBX model performs well in the company's favourite terrain, the "High Net Worth Individuals" market. Aston Martin's enthusiasm could be sensed after the launch event today. Tweeting from Beijing where the car was launched, Andy Palmer, Aston Martin's 56-year-old CEO called the DBX launch the "proudest moment" of his "40 year career." The positivity did not translate much on to the company's share price on the stock exchange which remained largely unchanged at the end of the day.