Volvo postpones going public
According to the newspaper The Financial Times, the Chinese car manufacturing group Geely has postponed the IPO (Initial Public Offering) of its successful daughter, Volvo Cars.
Zheijang Geely bought Volvo Cars in 2010 (from Ford) and recently thought that the company was ready to go public before the end of this year. It counted on 30 billion dollar (± 26 billion euro) valorization of this IPO, but now has postponed the whole exercise.
Threatening trade war
Being owned by a Chinese company, Volvo fears the rising frictions between China and the US (one of its biggest markets) possibly resulting in a trade war and growing trade barriers. “The problems concerning trade negotiations are difficult for us, we export cars in both ways between China and the States”, says Volvo CEO, Hakan Samuelsson.
That was the major reason that Volvo estimated the youngest situation as “non optimal” to go public. “It is important that we have a manoeuvring space and that we can still look our investors in the eyes after a year”, adds Samuelsson. “Going public is still realistic, but not immediately. It has to be done at the right moment.”
Swedish pension funds
The supposed investors in Volvo are mainly Swedish pension funds and Samuelsson wants to avoid in all conditions that they would be disappointed by a receding share value.
Volvo has registered record sales in 2017 and has already announced that it will launch only new models with a certain degree of electrification, from plug-in hybrid to full electric. It has several manufacturing plants in China and is going to open one in the US, more specifically in Charleston, South Carolina.