Volvo Cars raises $500m in IPO step

STOCKHOLM: Geely’s Volvo Cars have raised 5 billion Swedish crowns (£429.03 million) from a group of Swedish institutional investors in a step towards a listing of the Chinese-owned company.
The investors bought newly-issued preference shares that would have “an immaterial dilutive effect” on China’s Zhejiang Geely Holdings’ 100 per cent ownership.
“Today’s move is another step towards Volvo Cars’ long expressed ambition to act as a listed company,” the company said in a statement.
Rising sales and profits at Volvo Cars has led to speculation of a stock market listing over the past year, although the company had said earlier this month it had no immediate plans to list.
Pension funds AMF, the First Swedish National Pension Fund and insurance company Folksam had bought the shares that could later be converted into listed ordinary shares.
The Gothenburg-based company returned to international bond markets earlier this year, with its first corporate bond raising 500 million euros ($519 million), followed by its first Swedish bond issue last month.
Volvo, which has partnered with Uber Technologies to develop self-driving cars, also announced joint venture with Autoliv to make and sell self-driving and driver assistance software.
Volvo sold 473,528 cars in January through November, up 7 per cent year-on-year, helped by strong demand for its XC90 SUV, the first new model developed under Geely ownership and leaving it poised for its third straight year of record sales.
Geely bought Volvo Cars from Ford Motor Co in 2010. — Reuters