Swedish Pride: Is Volvo About to Return to the Stock Market?

swedish pride is volvo about to return to the stock market

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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  • Don1967 Don1967 on Dec 20, 2016

    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.

  • Akear Akear on Dec 22, 2016

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

  • Terelaad The entire plant is just a toy for the rich.
  • Seanx37 If it made economic sense, it would have happened decades ago. No one would insure such places. And few are going to take $60-150k electric cars off road unless they are very wealthy
  • MaintenanceCosts Seems pretty obvious that they're leaving room for a SRT with the 2.0T and the electric motor. The R/T will probably be slower than the GT given the extra weight, but without the 9-speed it will be a much nicer drive.
  • Art Vandelay Lawyers would Eff it up. That and the NIMBYS. I agree with you, but it ain't gonna happen
  • EBFlex They are getting rid of the Charger and Challenger for a modern day Neon?just end it Dodge, you had a great run