Volvo Cars to dilute stake in EV maker Polestar (updated)

Volvo Car AB

23/02/2024 02:39

(Changes headline, adds CEO comment in paragraph 4, details
from the statement in paragraphs 2-6, background in paragraph 3)
       Feb 23 (Reuters) - Volvo Cars  VOLCARb.ST  said on
Friday it plans to distribute 62.7% of its stake worth 9.5
billion crowns ($920.17 million) in Swedish electric vehicle
manufacturer Polestar Automotive Holding  A4N1y.F  to its own
shareholders.
    After completion of the proposed distribution, Sweden-based
Volvo Cars said it will retain an 18% stake in Polestar.
        The heavy involvement by Sweden-listed Volvo Cars in
Polestar, where it owns around 48% of the shares, has been
criticised by analysts who see the stake as a drag on Volvo's
resources.
        "As we have significant operational collaborations with
Polestar and a financial relationship, it is logical for us to
retain influence through a smaller 18% stake in Polestar," said
President and CEO of Volvo Cars Jim Rowan.
        The company said it has a financial relationship with
Polestar through an outstanding convertible loan of $1 billion. 
    China's Geely Holding  0175.HK , which is a majority owner
of Volvo Cars, will continue to provide operational and
financial support to Polestar.
    The stake distribution will be made through a 2:1 share
split, followed by an automatic share redemption process, Volvo
Cars said.

    
   ($1 = 10.3242 Swedish crowns)

 (Reporting by Rishabh Jaiswal and Shivani Tanna in Bengaluru;
Editing by Sherry Jacob-Phillips)
 ((rishabh.jaiswal@thomsonreuters.com;))