OSLO – Volvo Cars fell sharply on the stock market Friday morning, falling to a historic low, after the decision of its parent company, Geely, to sell shares of the Swedish car manufacturer at a steep discount.
The Chinese group placed some 100 million Volvo Cars shares on Thursday at a price of 37 Swedish crowns per share, which represents around $350 million, according to the bookrunners of the operation.
Volvo shares closed on Thursday at 40.84 crowns, representing a discount of 9.4%.
On the Stockholm Stock Exchange, around 09:30 GMT, Volvo Cars shares plunged 10.21% after hitting an unprecedented low of 35.25 Swedish crowns. The manufacturer, whose shares have lost 25% since the start of the year, is at the bottom of the STOXX 600 on Friday, which is gaining 0.84% at the same time.
In a press release, Geely specified that this sale represented 3.4% of the capital of Volvo Cars and that it still held 78.7% of the capital of the car manufacturer.
“The placement will increase the free float and further expand the shareholder base of Volvo Cars. The profits received by Geely Holding are intended to be used to support business development within the group,” says Geely.
Volvo Cars will not receive any money from this sale, of which Goldman Sachs, BNP Paribas and SEB were the bookrunners, Geely said.
The Chinese group has committed to respecting a 90-day retention period for its remaining stake, “subject to the usual exceptions and waivers” from the bookkeepers.
(Report by Terje Solsvik and Boleslaw Lasocki, by Claude Chendjou, edited by Blandine Hénault)
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