London CNN Business  — 

Aston Martin has been rescued from collapse by a £500 million ($656 million) bailout led by a Formula 1 billionaire.

The ailing carmaker said in a statement Friday that Canadian Lawrence Stroll, who is part owner of the Racing Point Formula 1 team, is leading a group that will pay £182 million ($239 million) for 16.7% of the company.

Aston Martin will then raise an additional £318 million ($417 million) through the issue of new shares, some of which will be purchased by Stroll’s consortium.

Stroll will become executive chairman of the company, which has battled weak demand for some of its models, a global auto slowdown and uncertainty over Brexit following an IPO in 2018.

Aston Martin unnerved investors earlier this month by warning that its profit for 2019 is expected to fall by nearly half from a year earlier despite healthy orders for its first ever SUV, the DBX. Some of the proceeds from the capital raise will be used to ramp up production of this model, but investment in electric vehicles will be delayed beyond 2025, the company said.

“The difficult trading performance in 2019 resulted in severe pressure on liquidity which has left the company with no alternative but to seek substantial additional equity financing,” Penny Hughes, who will step down as Aston Martin chairperson, said in a statement.

“Without this the balance sheet is not robust enough to support the operations of the group,” Hughes said.

Shares in the carmaker, the favorite ride of fictional British secret service agent James Bond, jumped as much as 30% in London on Friday.

But they are still about 75% below their IPO price. Aston Martin has lost more than £3 billion ($3.9 billion) in value since listing in October 2018, a stinging indictment of its once lofty ambition to seek a valuation on a par with Italian carmaker Ferrari (RACE).

Aston Martin’s financial position is now so dire that the company said Stroll is providing an immediate cash injection of £55.5 million ($72.8 million).

From luxury to racing

Given Aston Martin’s checkered 106-year record, which includes several bankruptcy filings, investors may think Stroll has been handed a poisoned chalice. The stock pared some of its earlier gains on Friday and was trading about 18% higher at £4.75 ($6.23) by noon in London.

But the serial investor is eager to undertake the turnaround.

“I believe that this combination of capital and my experience of both the motor industry and building highly successful global brands will mean that, over time, we fulfill Aston Martin Lagonda’s potential,” Stroll said in a statement.

Stroll was an early investor in Tommy Hilfiger, Polo Ralph Lauren and Michael Kors. John Idol, the CEO and chairman of Michael Kors’ current owner, Capri Holdings, is also a part of the consortium.

Aston Martin’s current shareholders, which include European and Kuwaiti private equity groups that together own about 61% of the company, are expected to own 50.5% following the rescue.

As part of the deal, the Racing Point team will be renamed Aston Martin F1 starting with the 2021 season, the company said. For 2020, Aston Martin will continue to sponsor the rival Red Bull team.

— Charles Riley contributed reporting.