acf domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/ecg/ecgassociationdev/wp-includes/functions.php on line 6121Automotive News Europe — 2023-11-17
Automotive Industry
Chinese billionaire Li Shufu's Zhejiang Geely Holding Group is raising around $350 m selling part of its stake in Volvo Cars, responding to investor concerns about the automaker's limited free float.
Geely, which owns a web of automotive interests in Europe, offered approximately 100 m shares in the company at 37 kronor ($3.49) apiece, 9.4% below Thursday's closing price.
The sale of the 3.4% stake leaves Geely with a holding in Volvo of 78.7%, Geely said in a statement.
"The placing will increase the free float and further broaden the shareholder base of Volvo Cars. Proceeds received by Geely Holding are intended to be used to support business development within the group," it added.
Geely said it will continue to support Volvo. None of the cash from the share sale went to Volvo.
At 0900 GMT, Volvo shares were down 10.2% at 36.66 crowns, having traded as low as 35.25 crowns. The share is down 25% year-to-date.
The sale follows complaints from analysts and investors over the company’s small free float, which has put pressure on the stock and fueled high trading volatility. Volvo debuted in Stockholm two years ago at 53 kronor a share.
Continued support
"This increase in our public float and improvement in trading liquidity benefits both new and existing investors," Volvo CEO Jim Rowan said in a separate statement.
The free-float concerns continue to put off long-term investors "despite the fundamental attractiveness" of the stock, Bernstein analyst Daniel Roeska said this month in a note.
Li's automotive holdings include Lotus Technology and a stake in Aston Martin. It picked up Volvo from Ford in 2010 after the brand had long languished under the U.S. automaker.
Geely earlier this year inked a deal with Renault to pool combustion-engine assets as the industry moves into the electric age.
Volvo launched the EM90 luxury battery-electric van this month aimed at China and Southeast Asia, where upscale vans are gaining in popularity.