Volvo Cars has raised 5 billion Swedish crowns ($542 million) from a group of Swedish institutional investors, another step to share market flotation almost seven years after being bought by Chinese automaker Zhejiang Geely Holdings.
The investors have purchased newly-issued preference shares that is going to have “an immaterial dilutive effect” on Geely’s 100 percent ownership, Volvo stated on Tuesday, while suggesting that the deal marks a turning point in its turn-around in Chinese hands after deep losses under former owner Ford Motor.
“Today’s relocation is another step towards Volvo Cars’ long revealed aspiration to act as a listed business,” Volvo stated.
A spokesman for Geely said that it stood by a former statement that there were “no immediate plans” for an initial public offer of shares in Volvo, refusing to define the term “immediate”.
One of Sweden’s most significant companies by sales and staff numbers, Volvo was bleeding loan throughout the 2008 financial crisis and Ford – which was struggling to endure – had to sell it off at a discount rate cost.
After Geely’s $1.8 billion of Volvo – a byword for a safe and unfussy design of Swedish cars – numerous experts were doubtful that China’s biggest private-run vehicle maker could take on competitors such as Mercedes-Benz and BMW.
However a wave of financial investment in brand-new models and factories has silenced critics, while the company has continued to highlight its Swedish roots with recent advertisements featuring soccer player Zlatan Ibrahimovic.
The company is trying to find development in the United States and China in addition to Europe, where it hopes to double its market share.
Volvo sold an estimated of 473,528 cars in January to November, assisted by strong demand for its XC90 SUV – the very first brand-new model established under Geely ownership – and ought to top 2015’s record sales.