Li Shufu’s Geely raises $350 million selling part of its stake in Volvo Car

BLOOMBERG

Chinese billionaire Li Shufu’s Zhejiang Geely Holding Group Co is raising around $350 million selling part of its stake in Volvo Car AB, responding to investor concerns about the automaker’s limited free float.
Geely, which owns a web of automotive interests in Europe, offered approximately 100 million shares in the company at 37 kronor ($3.49) apiece, according to a statement.
The sale follows complaints from analysts and investors over the company’s small free float, which has put pressure on the stock and fuelled high trading volatility. Volvo Car debuted in Stockholm two years ago at 53 kronor a share.
The placing represents 3.4% of Volvo Car’s issued share capital and 4.1% of Geely’s holding, and further broadens the shareholder base, the Chinese investor said.
“This increase in our public float and improvement in trading liquidity benefits both new and existing investors,” Volvo Car Chief Executive Officer Jim Rowan said in a separate statement. Geely said it will continue to support the automaker.
Volvo Car has dropped 14% this year. The free-float concerns continue to put off long-term investors “despite the fundamental attractiveness” of the stock, Bernstein analyst Daniel Roeska said in a note.
Li’s automotive holdings include Lotus Technology and a stake in Aston Martin Lagonda Global Holdings Plc.
Geely earlier this year inked a deal with Renault SA to pool combustion-engine assets as the industry moves into the electric age.
It picked up Volvo Car from Ford Motor Co in 2010 after the brand had long languished under the US automaker.
Goldman Sachs, BNP Paribas and Skandinaviska Enskilda Banken AB are acting as joint coordinators and bookrunners for the placement.