Volvo Cars Raises SEK5 Billion From Sale of Newly-Issued Preference Shares
Volvo Cars, the premium car maker, has raised SEK5bn from the sale of newly-issued preference shares to a group of Swedish institutional investors.
The share sale follows two bond issues earlier this year, a EUR500m bond to global institutional investors in May, and a further SEK3bn to Swedish institutional investors in November. The bonds were issued for general corporate purposes and aimed at increasing the company’s financial flexibility. Today’s move is another step towards Volvo Cars’ long expressed ambition to act as a listed company.
Volvo Cars’ financial performance is strong. It is expected that 2016 will be another record year in terms of sales, with growth coming across the board from its three main sales regions of Europe, China and the US. Operating profit for the first nine months of the year was SEK7.7bn compared to a full year operating profit for the whole of 2015 of SEK6.6bn, prompting Volvo Cars’ expectations for the full year to “substantially improve” profits compared to last year.
Volvo Cars has successfully built a sense of momentum around its transformation since it was acquired by Zhejiang Geely Holdings in 2010, driven by the ongoing renewal of its complete product range, powertrain and chassis technologies and safety and connectivity technologies.
In coming years Volvo Cars will continue to reposition its brand to compete with its global premium rivals, revive its operations in the US and develop its global manufacturing footprint, grow further in China and double its market share in Europe. It will also introduce an entirely new model range, embed its new engine technologies and maintain its position as the leader in car safety and autonomous drive (AD) technologies. Volvo Cars is also forging alliances that place it at the forefront of the latest technological developments in the automotive industry developments.
It intends to set up a joint venture with Autoliv, the leading automotive safety technology company, to design and manufacture separately-branded AD and driver assistance software technology packages for sale to third party OEMs. Volvo Cars has also joined forces with Uber, the ride sharing company, to build and co-develop base vehicles for AD cars.
About the Author
Subhash Nair Written work on dsf.my. @subhashtag on instagram. Autophiles Malaysia on Youtube.
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