Volvo Cars announced on Friday it plans to distribute 62.7% of its stake worth 9.5 billion crowns ($920.17 million) in Swedish electric vehicle manufacturer Polestar to its own shareholders.
The proposed distribution follows the evaluation of the Polestar Shareholding that was communicated on 1 February 2024 and will enable Volvo Cars to concentrate its resources on the next phase of its transformation. Volvo Cars will therefore not provide further funding to Polestar.
The stake distribution will be made through a 2:1 share split, followed by an automatic share redemption process, Volvo Cars said.
Going forward, Geely Holding will continue to provide operational and financial support to Polestar. Volvo Cars’ and Polestar’s strong operational collaboration across R&D, manufacturing, after sales and commercial will continue to the benefit of both companies and as Volvo Cars has significant collaborations with Polestar and a financial relationship through the outstanding convertible loan of USD 1 billion, Volvo Cars will remain with an 18.0 percent stake, and thereby continue to have influence over Polestar.
Jim Rowan, President & CEO of Volvo Cars, commented:
“As we embark on the next stage of our transformation, gearing up to lead in next-gen mobility, our focus sharpens on Volvo Cars’ development. The proposed distribution positions Volvo Cars strategically, and provides direct exposure to the Polestar share for our shareholders. As we have significant operational collaborations with Polestar and a financial relationship, it is logical for us to retain influence through a smaller 18.0 percent stake in Polestar. That said, Volvo Cars will not provide further funding to Polestar. With Polestar’s strengthened business plan, the launch of Polestar 3 and Polestar 4, and Geely´s commitment and support, the company is well positioned for growth.”
