Preference shares with Swedish investors

Volvo has sold 5 billion Swedish crowns ($519 million) of convertible preference shares to a group of Swedish investors to replace an issue of preference shares of the same size that had matured.

The automaker, owned by China’s Geely Holding, said the deal was a vote of confidence in its business from major investors including Swedish pension fund AMF and Swedish insurance and pension savings group Folksam.

Automakers are grappling with trade wars, high costs for developing electric and autonomous cars, and a global industry downturn, which caused Volvo to postpone plans for a listing last year.

“Today’s announcement represents a significant, continued endorsement for Volvo Cars from one of Sweden’s largest pension funds and one of the country’s leading insurance and pension savings group, who together manage assets worth 1,100 billion crowns,” the company said in a statement.

The new preference shares can be repurchased or converted into common shares of Volvo Cars, the automaker said.

Volvo said in July it would cut fixed costs by 2 billion crowns with measures to be completed by the first half of 2020.

europe.autonews.com

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