December 21, 2018 / 8:58 AM / in 7 months

Swedish fund AP1 exits Volvo Cars as sees no IPO around corner

STOCKHOLM (Reuters) - Sweden’s national pension fund has sold its preference shares in Volvo Cars after concluding it saw no clear intention to list within the next 12 months from the Geely-owned carmaker.

FILE PHOTO: The Volvo S60 is displayed during the inauguration of Volvo Cars first U.S. production plant in Ridgeville, South Carolina, U.S., June 20, 2018. REUTERS/Randall Hill/File Photo

Volvo’s fortunes have turned since Geely bought it in 2010 and its popular new premium models now compete with larger rivals Daimler (DAIGn.DE) and Volkswagen (VOWG_p.DE), but its initial public offering plans stalled earlier this year.

Swedish insurance and savings group Folksam and pension fund investor AMF said on Friday they had each had bought AP1’s preference shares for a nominal 750 million Swedish crowns ($84 million), raising their respective nominal interests in Volvo to 1.75 billion crowns and 3.25 billion crowns.

AP1’s exit comes exactly a year after it, along with Folksam and AMF, bought preference shares from Volvo, a move seen as a step towards the Chinese-owned carmaker being floated as the shares would be converted to common stock if it listed.

Although Volvo began working on a listing and seeking a valuation of $16 billion to $30 billion this year, it postponed its plans in September, blaming trade tensions and a downturn in automotive stocks.

“When we went into the preference share deal there was an intention to do an initial public offering even if it wasn’t stated exactly the timing,” the fund’s head of equities Olof Jonasson told Reuters following the sale announcement.

“We interpret... no clear intention of being IPOed in the next 12 months, so we can’t really continue to own it,” he said.

A Volvo spokesman declined to comment on the timing of a potential listing, while Geely, which Jonasson said was also involved in the discussions, did not immediately comment.

Jonasson, who declined to reveal the price AP1 sold its Volvo shares for, added: “it was not a loss on this one”.

AMF and Folksam said the purchase allowed them to add a Swedish household name to their portfolios and make an investment with a “good stable return in relation to risk”.

($1 = 8.9512 Swedish crowns)

Reporting by Niklas Pollard and Esha Vaish; Editing by Alexander Smith

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