Shares in Volvo Car have taken a nosedive, landing at the bottom of the Stoxx Europe 600 index. The Swedish auto maker's majority shareholder, Chinese auto group Zhejiang Geely Holding Group, has announced its intention to sell some of its shares in order to enhance Volvo Car's free float.
At 0846 GMT, Volvo Car shares traded at SEK36.50, marking an 11% drop.
Zhejiang Geely Holding Group acquired Volvo Car from Ford in 2010 and presently holds approximately 82% of the company. However, the company plans to reduce its stake to 78.7% as a strategic move to boost liquidity and extend opportunities for both institutional and retail investors. This will enable increased long-term value generation for all stakeholders involved.
Apart from its ownership in Volvo Car, Geely also holds ownership in Lotus Cars and Smart through a joint venture with Mercedes-Benz. Geely has recently heightened its stake in Aston Martin Lagonda Global Holdings to around 17%. The company operates various other brands across the passenger cars, commercial vehicles, and technological services sectors.
Volvo Car Chief Executive Jim Rowan emphasized the benefits of this move, stating, "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."
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