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Aston Martin will raise £653m in new investment by bringing in Saudi Arabia as a major shareholder and launching a rights issue, after turning down an investment offer that would have handed control of the luxury carmaker to Chinese Geely and former Aston owner Investindustrial.

Saudi Arabia’s Public Investment Fund will take a 16.7% stake via a £78m equity placement, giving it two seats on the board.

Aston will also launch a £575million rights issue, with PIF, major shareholder Mercedes-Benz and owner Lawrence Stroll’s Yew Tree Consortium all agreeing to take over their rights.

In total, Yew Tree, Mercedes and PIF will invest £335m through the rights issue or the new shares, Aston said. This leaves other investors paying up to £318million through the rights issue, which has been fully subscribed.

Around half of the money will be used to pay down debt, which stood at £957million at the end of March.

The company has also rejected a rival £1.3bn investment proposal from former Chinese owners of Geely and Aston, Italian investment group Investindustrial, it said on Friday.

The pair are said to have injected £203m for new equity, making them the largest shareholder, although they are below the 30% threshold at which they would be forced to launch a formal takeover.

Their proposal, received by Aston last week, also included a £1.1bn rights issue.

Aston rejected the proposal, which it said did not present an attractive financing option, and said there was no need for further talks.

Aston also said on Friday that first-half car sales were below expectations. It sold 2,676 vehicles in the six months, although it still aims to produce 6,600 this year in total.

The company has also pushed back the date it will start producing silver from 2023 to 2024.

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