Volvo Cars Raises More Money, Poised For Share Sale.
“This is another step towards a return to the stock market for Volvo”
Volvo’s march back to normality and a stock market listing continues after it raised another $500 million from the sale of preferred shares to investors outside of Sweden and mainly in China.
That brings Volvo’s recent capital raising to about $1 billion.
“This is another step towards a return to the stock market for Volvo,” said Barclays Equity Research analyst Kristina Church.
Chinese owner Zhejiang Geely Holding Group bought Volvo from Ford Motor in 2010 for $1.8 billion. The company has long told investors it planned to seek a stock market listing but has never said exactly when.
Geely has invested $11 billion in Volvo since the purchase from Ford, according to the Wall Street Journal, to liven up its model range to boost sales in the U.S. and China and compete better with BMW, Mercedes and Audi. At the Geneva Car Show in March, Volvo unveiled its new XC-60 compact SUV to some critical acclaim.
In 2016 Volvo raised net profit nearly 70 per cent to 7.5 billion crowns, as sales rose 6 per cent to 534,332. It has an 800,000 target for 2020.
Investment researcher Evercore ISI agreed that Volvo seems set on a stock market listing.
“The company is benefitting from the successful introduction of new products and we see no reason why this should not continue. Indeed, the XC-60 and Volvo’s stand at Geneva was one of the more impressive in our view. What (price) the market would be willing to pay, in the event of an IPO (Initial Public Offering) remains to be seen,” Evercore ISI said in a report.