By on December 20, 2016

volvo emblem logo grille

Volvo has only recently started exhuming itself from its post-recession sales hole and pushing its disastrous fling with Ford into the past. Turning a corner, the company has sold over 470,000 cars so far this year, aided largely by the successes of its XC90 SUV. Operating earnings having tripled in the first half of this year.

Now, the company has raised 5 billion Swedish crowns — $532 million — from the sale of newly-issued preference shares to a group of Swedish institutional investors.

All signs point to a confident company that wants back into the stock market.

The financial input is divided between three Swedish institutions, including two pension funds and the Folksam insurance company. While Volvo says the shares may be repurchased or converted into listed ordinary shares “upon the majority stakeholder’s decision,” it has publicly stated that no such decision has yet been made.

“Today’s move is another step towards Volvo Cars’ long expressed ambition to act as a listed company,” the company said in a statement.

Improving sales and profits at Volvo has led to rampant speculation of an inevitable stock market listing all year. While the company made a statement just last month that it had no immediate plans for an initial public offering, current events seem to indicate otherwise.

“The detailed terms of the sale have not been disclosed, but the transaction will have an immaterial dilutive effect on the current 100 per cent ownership of Volvo Cars by Zhejiang Geely Holdings,” Volvo said.

Geely purchased Volvo Cars from Ford Motor Company in 2010. The Blue Oval bought the brand in 1999, but tossed it overboard to right a recession-rocked ship. The Swedish brand recently introduced its new S90 sedan and V90 wagon, with a lineup of small vehicles on the way.

[Image: Volvo]

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8 Comments on “Swedish Pride: Is Volvo About to Return to the Stock Market?...”

  • avatar

    With sales rising, and smaller new models coming down the pipe just as VW is reeling, this would seem as good a time as any to raise capital. Assuming Tesla hasn’t ruined it for everybody, of course.

    • 0 avatar

      The question in my mind: whom is Volvo raising capital for? Is it for Volvo R&D or pay back to Geely for their 1.9 billion investment?

      • 0 avatar

        Maybe to hire new people…it is a bit entertaining to see how Volvo’s recent step up has been followed by bleeding central people to Audi, Tesla and others.

      • 0 avatar

        @CallMeDick – Geely is an owner, not a lender. A new share issue would dilute its share of future profits, but if the capital is used to grow earnings Geely won’t mind.

      • 0 avatar

        Volvo is supposed to be bringing manufacturing jobs to South Carolina a la BMW – hopefully that’s where a big investment will be made:

        • 0 avatar

          I really wish they would have used the area they had for bus manufacturing in Chesapeake, VA.

          P.S. On the Volvo Parkway in 2012, they had an Easter Egg on Google Maps!!!

          https:[email protected],-76.2542637,3a,15y,175.71h,88.16t/data=!3m6!1e1!3m4!1sHCs8IYXPCjsNScSvGjf-jg!2e0!7i13312!8i6656

          https:[email protected],-76.2544109,3a,34.6y,150.01h,85t/data=!3m7!1e1!3m5!1soDX6XR2WMn_gRC_tyMhyBQ!2e0!5s20120801T000000!7i13312!8i6656

  • avatar

    Volvo has slipped into oblivion. The Swedish auto industry barely exists.

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