Shares in Volvo fell by more than 11% on Friday after its major shareholder Geely divested a portion of its stake in the car-maker at a big discount to yesterday’s closing price.
China-based company Geely said it now has a 78.7% remaining stake in the car-maker, despite selling 3.4% of shares in the company through a share placing.
Geely sold a total of US$350 million of Volvo stock through a placement of 100 million shares on Thursday, according to reports.
The placing valued the shares at about 37 Swedish krona each, less than the 40.84 krona share price of its shares on Thursday.
Volvo’s Chief Executive Officer Jim Rowan said the share placement would enable a wider base of shareholders to invest in the car maker.
Volvo’s Stockholm-listed share price fell from about 40.84 krona each on Thursday to below 36.29 krona on Friday.