Volvo Passes Around the Hat Ahead of Possible IPO
Volvo denies that it wants to return to publicly listed status, but a new round of fundraising has many believing the Swedish automaker is about to end its 20-year absence from the stock market.
According to the Financial Times, the Geely-owned company hopes to raise about $500 million from a new batch of preference shares. Unlike the last time it held out its hat, this time Volvo wants Chinese buy-in.
Talks are underway to sell the shares to Chinese buyers, including sovereign wealth funds, sources tell FT. Those shares can be converted to regular Volvo stock in the event of an initial public offering.
When Volvo last went looking for cash in December, it raised $533 million through preferred shares sold to Swedish pension funds.
Returning to the stock exchange could prove lucrative for the resurgent automaker, and would also give it a measure of clout. The company has struggled to retain its status after its sale to Ford in 1999 ended in heartbreak, followed by a purchase by China’s Geely Automotive in 2010. Improving sales and stabilizing its finances are now job one at Volvo.
So far, it hasn’t confirmed any plans for an IPO — the official line remains that it exists as an option.
“We don’t need the capital,” one unnamed executive told FT.
Banking sources contacted by the publication claim that an IPO is a very real possibility, with a number of stock exchanges mentioned during the ongoing discussions.
Wonder if Volvo Trucks will buy into the IPO?
If Volvo sources say the money isn't even needed, how well-fed are Geely executives looking these days?