Shares Of Volvo Cars Fall To A Historic Low As Geely Reduces Its Position

After China's Geely, the largest stakeholder of the Swedish automaker Volvo Cars, sold a minor portion of its investment at a steep discount to the previous day's closing price, the automaker's shares plunged as much as 14% to a record low on Friday.
 
Geely started a placement of 100 million shares in Volvo Cars, which the deal's bookrunners said were sold for about 37 Swedish crowns apiece after the market closed, for a total of $350 million. The stock was 40.84 crowns at the close.
 
Geely now owns 78.7% of Volvo Cars after selling its 3.4% interest, the Chinese business said in a statement.
 
"The placing will increase the free float and further broaden the shareholder base of Volvo Cars. Proceeds received by Geely Holding are intended to be used to support business development within the group," it added.
 
Volvo Cars received none of the proceeds from the sale of its shares.
 
"This increase in our public float and improvement in trading liquidity benefits both new and existing investors. It allows a wider base of shareholders to invest in Volvo Cars," the Swedish company's CEO Jim Rowan said in a statement.
 
Volvo Cars declined to say further regarding the share transaction, .
 
According to Geely, the transaction's bookrunners were Goldman Sachs, BNP Paribas, and SEB.
 
For its remaining stake, Geely Holding has agreed to a 90-day lock-up period, "subject to customary exceptions and waivers" by the bookrunners.
 
(Source:www.marketscreener.com)