Volvo scales back Sweden IPO as its value tumbles to £13bn
Car manufacturer Volvo has delayed its initial public offering on the Nasdaq Stockholm exchange amid faltering investor confidence.
The company’s IPO will be pushed back to Friday according to a statement issued today which announced plans to scale back the offering.
Shares will be sold for a price of SEK 53, the bottom of its suggested range, with the company stating it hopes to raise SEK 20bn (£1.7bn) from the public offering, down from initial expectations of SEK 25bn. The revised share price now values the company at £13bn, a far cry from a valuation of £20bn which Volvo had hoped its IPO would achieve.
Håkan Samuelsson, CEO of Volvo Cars, said: “with the amended structure, we look forward to listing on Nasdaq Stockholm on Friday, which is a major milestone for Volvo Cars.
“The proceeds raised from the IPO together with our strong balance sheet will secure the funding of our fastest transformer strategy and the delivery of our mid-decade ambitions,” Samuelsson added.
The company noted strong support from long-term institutional investors with indicated investments, anchor investor support and previously announced cornerstone commitments together totalling SEK 14.1bn.
Nonetheless, Volvo’s main owner, Geely Sweden Holdings AB, has resolved not to exercise the upsize option for the IPO and instead the offering has been downsized. China-based Geely reportedly put off investors because of the control it would continue to have over the company despite the admission of new shareholders.
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