We attach a press release dated 20 December 2016 issued by the Issuer relating to a transaction completed by the Issuer (the Transaction). The information contained in the press release constitutes "inside information" for purposes of Regulation (EU) No 596/2015 (MAR). A decision to delay the disclosure of that inside information was taken on 13 October 2016 by the Issuers Disclosure Committee, who determined that the conditions to delaying disclosure of inside information contained in Article 17(4) of MAR were met as follows:
(a) immediate disclosure was likely to prejudice the legitimate interests of the Issuer since public disclosure of the Transaction prior to the official announcement and completion of the Transaction was likely to have affected negatively the prospects of the final negotiation and agreement as to the terms of the Transaction;
(b) delaying the disclosure was not likely to mislead the public since, in accordance with general market practice, it is not possible to announce transactions like the Transaction before the terms thereof are finally agreed and the success of the Transaction assured; any earlier announcement would be very likely to mislead the public; and
(c) the Issuer was able to ensure the confidentiality of the inside information since information barriers were put in place in accordance with internal policies of the Issuer to ensure that the Transaction was only know to those persons directly involved therewith and such persons were under an obligation to preserve the confidentiality thereof.
This notification is made on 20 December 2016 and the press release is attached below.
Volvo Cars, the premium car maker, has raised SEK5bn from the sale of newly-issued preference shares to a group of Swedish institutional investors.
The group of investors comprises two Swedish pension funds, AMF and the First Swedish National Pension Fund (AP1), as well as Folksam, a Swedish insurance company.
The preference shares may be repurchased or converted into listed ordinary shares upon the majority shareholder’s decision. At this time, no decision has been taken.
The issuance has been conducted to further diversify Volvo Cars' long term funding sources.
The detailed terms of the sale have not been disclosed, but the transaction will have an immaterial dilutive effect on the current 100 per cent ownership of Volvo Cars by Zhejiang Geely Holdings.
The share sale follows two bond issues earlier this year, a EUR500m bond to global institutional investors in May, and a further SEK3bn to Swedish institutional investors in November. The bonds were issued for general corporate purposes and aimed at increasing the company's financial flexibility.
Today’s move is another step towards Volvo Cars’ long expressed ambition to act as a listed company.
Volvo Cars' financial performance is strong. It is expected that 2016 will be another record year in terms of sales, with growth coming across the board from its three main sales regions of Europe, China and the US.
Operating profit for the first nine months of the year was SEK7.7bn compared to a full year operating profit for the whole of 2015 of SEK6.6bn, prompting Volvo Cars' expectations for the full year to "substantially improve" profits compared to last year.
Volvo Cars has successfully built a sense of momentum around its transformation since it was acquired by Zhejiang Geely Holdings in 2010, driven by the ongoing renewal of its complete product range, powertrain and chassis technologies and safety and connectivity technologies.
In coming years Volvo Cars will continue to reposition its brand to compete with its global premium rivals, revive its operations in the US and develop its global manufacturing footprint, grow further in China and double its market share in Europe.
It will also introduce an entirely new model range, embed its new engine technologies and maintain its position as the leader in car safety and autonomous drive (AD) technologies.
Volvo Cars is also forging alliances that place it at the forefront of the latest technological developments in the automotive industry developments.
It intends to set up a joint venture with Autoliv, the leading automotive safety technology company, to design and manufacture separately-branded AD and driver assistance software technology packages for sale to third party OEMs.
Volvo Cars has also joined forces with Uber, the ride sharing company, to build and co-develop base vehicles for AD cars.
HSBC Bank plc acted as Sole Placement Agent to Volvo Car AB in connection with the transaction.
Morgan Stanley & Co. International plc acted as financial advisor to Volvo Car AB in relation in the transaction.
This announcement contains inside information within the meaning of Regulation (EU) No 596/2014 of 16 April 2014 on market abuse.
Volvo Car Group in 2015 For the 2015 financial year, Volvo Car Group recorded an operating profit of 6,620 MSEK (2,128 MSEK in 2014). Revenue over the period amounted to 164,043 MSEK (137,590 MSEK). For the full year 2015, global sales reached a record 503,127 cars, an increase of 8 per cent versus 2014. The record sales and operating profit cleared the way for Volvo Car Group to continue investing in its global transformation plan.
About Volvo Car Group
Volvo has been in operation since 1927. Today, Volvo Cars is one of the most well-known and respected car brands in the world with sales of 503,127 in 2015 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding (Geely Holding) of China since 2010. It formed part of the Swedish Volvo Group until 1999, when the company was bought by Ford Motor Company of the US. In 2010, Volvo Cars was acquired by Geely Holding.
As of December 2015, Volvo Cars had almost 29,000 employees worldwide. Volvo Cars head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars head office for China is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China) and body components in Olofström (Sweden).
HSBC Bank plc (“HSBC”) (which is authorised by the Prudential Regulation Authority (“PRA”) and regulated by the PRA and the FCA in the United Kingdom) is acting as Sole Placement Agent to Volvo Car AB and no one else in connection with the SEK5bn preference share issue and/or other matters referred to in this announcement and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the SEK5bn preference share issue, and is not, and will not be, responsible to any person other than Volvo Car AB for providing the protections afforded to its clients, nor for providing advice in relation to the SEK5bn preference share issue or any other matters referred to herein.
About Morgan Stanley
Morgan Stanley & Co. International plc (“Morgan Stanley”) (which is authorised by the Prudential Regulation Authority (“PRA”) and regulated by the PRA and the FCA in the United Kingdom) is acting as financial adviser to Volvo Car AB and no one else in connection with the SEK5bn preference share issue and/or other matters referred to in this announcement and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the SEK5bn preference share issue, and is not, and will not be, responsible to any person other than Volvo Car AB for providing the protections afforded to its clients, nor for providing advice in relation to the SEK5bn preference share issue or any other matters referred to herein.
For more information, please contact:
Vice President, Head of Investor Relations
Volvo Car Group
Phone: +46 31 59 22 55
Vice President, Global Head of Media Relations
Volvo Car Group
Phone: +46 723 717509
Volvo Cars Investor Relations
Phone: +46 31 32 52 169