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Volvo Cars: Reduced IPO scheduled for Friday

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Volvo Cars opening price will be 53 crowns ($6.16) per share. It will make its debut on the Stockholm Stock Exchange on Friday, the Swedish company announced on Monday. It also announced that it would reduce the size of its IPO.

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In its partial listing on the Stockholm Stock Exchange, Volvo Cars, owned by Chinese conglomerate Geely, plans to raise $2.3 billion, down from $2.9 billion initially.

According to last week’s announcement, the price corresponds to the bottom of the range (between 53 and 68 crowns per share). In early October, the company confirmed that it was considering a partial listing on the Stockholm Stock Exchange.

In a statement, the company said that it intends to raise a total of 20 billion crowns (about $2.3 billion).

The first day of trading for Volvo Cars will take place on October 29. Which is one day later than announced last week. M. Samuelsson, CEO of the company, said in the statement, “The proceeds from the IPO, combined with our strong balance sheet, will enable us to fund our fastest transformation strategy and realize our mid-decade ambitions.”

Volvo, which built its reputation on safety, is now among the most ambitious vehicles manufacturers in its transition to electric. The company aims to eliminate the gasoline engine by 2030.

Previously part of Ford, Volvo Cars separated from the Volvo Group, a giant in heavy trucks already publicly traded on the Stockholm Stock Exchange.

The Chinese company Geely acquired Volvo Cars from Ford for $1.8 billion in 2010. There is no indication that Geely will exercise its over-allotment option. The modified offer would result in a free float of 16% to 17.9%.

Handelsbanken analyst Hampus Engellau stressed that Volvo Cars was cautious to securing all institutional investors in Sweden.

For MetaNews.

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Jonathan Hobbs is an Australian investor and author that trades on a variety of asset classes, including currencies, equities, and commodities. Jonathan’s experience as a macro trader leverages his unique writing style to combine important elements, such as technical analysis and news. The other elements that he brings into his unique writing styles are foundation analysis aimed at rational equilibrium values, evaluating the sizes and motivations of buyers and sellers, as well as identifying the needs of the buyers and sellers in the individual markets. Jonathan is committed to quality writing for new traders as well as veterans.

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