Volvo Cars has raised $532 million from a group of Swedish institutional investors, in preparation for a share market flotation nearly seven years after being bought by Chinese carmaker Zhejiang Geely Holdings [GEELY.UL].
The investors have bought newly-issued preference shares that would have “an immaterial dilutive effect” on Geely’s 100 percent ownership, Volvo said on earlier in the week.
“Today’s move is another step towards Volvo Cars’ long expressed ambition to act as a listed company,” Volvo said in a statement.
A spokesman for Geely said it stood by a previous statement that there were “no immediate plans” for an initial public offer of shares in Volvo, declining to define the term “immediate”.
One of Sweden’s biggest companies by sales and staff numbers, Volvo was bleeding money during the 2008 financial crisis and Ford – which was struggling to survive – had to sell it off at a discount price.
After Geely’s $1.8 billion purchase of Volvo – a byword for a safe and unfussy style of Swedish cars – many analysts were skeptical that China’s largest private-run car maker could compete with rivals such as Mercedes-Benz (DAIGn.DE) and BMW (BMWG.DE).
The company is looking for growth in the United States and China as well as Europe, where it hopes to double its market share.
Volvo sold 473,528 cars in January through November, helped by strong demand for its XC90 SUV – the first new model developed under Geely ownership – and should top last year’s record sales.
Operating earnings tripled in the first half of the year to 5.59 billion crowns. Volvo said the fresh capital had been raised from three Swedish institutional investors, adding to speculation over the last year that the company could be looking at a dual listing in Stockholm and China.
Volvo returned to international bond markets earlier this year, with its first corporate bond raising 500 million euros ($519 million), followed by its first Swedish bond issue last month.
