Geely's Volvo Cars sets IPO price range, seeking up to $23 billion valuation

STOCKHOLM: Geely-owned Volvo Cars said on Monday its initial public offering would be priced within a range of 53 to 68 Swedish crowns per share, valuing the automaker at up to $23 billion in what is likely to be one Europe's biggest listings this year.

Volvo Cars, which has spent years under the Geely Holding umbrella strengthening its foothold in the premium market, said this month it planned to raise $2.9 billion through an IPO and list its shares on the Nasdaq Stockholm stock exchange.

Sources told Reuters last month that Geely was in advanced discussions with banks to list the Swedish company in the coming weeks, aiming for a valuation of about $20 billion.

The carmaker said in a statement its IPO would value the company, maker of models such as the high-end XC-90 SUV, at between 163 billion and 200 billion crowns and that shares would begin trading on Oct. 28.

"I think we have a very strong interest especially from the Nordic investors," Volvo Chief Executive Hakan Samuelsson told a news conference called at short notice as the prospectus for the offering was unveiled.

Volvo Cars announces IPO to raise nearly $2.9 billion

Volvo repeated that it expected the issue of new shares to provide the carmaker with gross proceeds of about 25 billion crowns before transaction costs. "This will secure that we can continue with the plan that we have," finance chief Bjorn Annwall said.

The transaction, including expected converted investments by investors AMF and Folksam, was seen resulting in a free float of about 19.5% to 24.0%, Volvo said.

The Gothenburg-based company had previously said that owner Geely would remain its biggest shareholder after the listing.

Electric-car maker Polestar, owned by Geely and Volvo, last month said it will go public by merging with a US-listed special purpose acquisition company (SPAC) backed by billionaire Alec Gores and investment bank Guggenheim Partners at an enterprise value of $20 billion.

In 2018, Volvo Cars and Geely, which also owns an 8.2% stake in Sweden's Volvo Trucks, postponed plans to float shares in the Swedish carmaker, citing trade tensions and a downturn in automotive stocks.