Volvo will reduce Polestar’s share capital to 18% on February 23, 2024 1

Volvo he decided significantly reduce its presence in the share capital of Polestar. So the car maker explained the details of the financial transaction it expected weeks ago. In particular, the board of directors intends to propose to the meeting of shareholders distribution of 62.7% of Poelstar shares currently held. At the end of this operation Volvo will fall from approximately 48% to 18% of capital Polestar company.

GEELY INCREASED CONTROL

Volvo says the cost of the operation is estimated at around 9.5 billion Swedish kronor (just under 850 million euros). There will be no problem getting the green light as Volvo’s largest shareholder. Gili (representing 78.7% of shares), has already given a positive conclusion.

Own The Chinese will tighten their control over Polestar (they own 39% of the capital) and have already stated that they will continue to support the automaker in its growth plans. The ties between Volvo and Polestar will not be severed completely. In fact, some cooperative relationships will continue in sectors such as research and development, manufacturing, after-sales service and commerce.

With this financial transaction, Volvo will be able to focus its resources on its transformation journey to become an all-electric brand by 2030. According to Polestar CEO Thomas Ingenlath, the operation will give his company a clearer ownership structure as well as a diversified one and positions it as a stronger and more independent brand within the Geely ecosystem.

It remains to be seen whether the new shareholder structure will have implications for Polestar’s plans in the short/medium term. Recall that at the end of January, Polestar announced a series of layoffs as part of its new business plan, which involves thorough cost cutting. The decision comes amid challenging auto market conditions, a weakening economy and a time when demand for electric vehicles is slowing.

Author: Filippo Vendrame

Source: HD Motori

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