Volvo Cars to propose a distribution of 62.7 percent of its Polestar shareholding to its shareholders. 9746

 

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS DOCUMENT. THIS DOCUMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION AND SHALL NOT FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, ANY OFFER OR THE SOLICITATION OF AN OFFER OR COMMITMENT TO BUY OR SUBSCRIBE FOR ANY SECURITIES TO ANY PERSON WHATSOEVER IN ANY JURISDICTION.

The Board of Directors of Volvo Car AB (publ) (“Volvo Cars”) today resolved to propose a distribution of 62.7 percent of Volvo Cars’ shareholding in Polestar Automotive Holding UK PLC (“Polestar” and the “Polestar Shareholding”) to Volvo Cars’ shareholders at its 2024 Annual General Meeting (“AGM”). If the AGM approves the proposal, Volvo Cars’ shareholding in Polestar will amount to an ownership stake of 18.0 percent of Polestar’s total outstanding shares. 

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. 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.

The transaction

• The Board of Directors of Volvo Cars today resolved to propose a distribution of 62.7 percent of Volvo Cars’ shareholding in Polestar to Volvo Cars’ shareholders at the 2024 AGM. If Volvo Cars' shareholders approve the proposal, Volvo Cars’ shareholding in Polestar, after completion of the proposed distribution, will amount to an ownership stake of approximately 18.0 percent of Polestar’s total outstanding shares. The Board of Directors’ final proposal will be presented in the notice convening the AGM to be published by way of a separate press release on 23 February 2024
• Geely Sweden Holdings AB, representing 78.7 percent of the shares and votes in Volvo Cars, has expressed its support for the distribution and has confirmed that it intends to vote in favour of the distribution at the 2024 AGM
• Based on the closing price of Polestar’s Class A American Depositary Shares (“ADSs”), listed on Nasdaq New York, on 22 February 2024, the proposed distribution corresponds to an extraordinary value transfer of approximately SEK 9.5 billion to Volvo Cars’ shareholders, equivalent to SEK 3.2 or 0.21 Polestar ADSs per Volvo Cars share.[1] It is further proposed that the Board of Directors shall be authorised to determine the final size and terms of the proposed distribution based on the value of Volvo Cars’ shareholding in Polestar in due course before the proposed share split is carried out
• After the distribution, Geely Holding will continue to provide operational and financial support to Polestar going forward. The distribution will enable Volvo Cars to concentrate its resources on the next phase of the Volvo Cars’ transformation, and Volvo Cars will therefore not provide further funding to Polestar
• After the distribution of the Polestar Shareholding to Volvo Cars’ shareholders, Volvo Cars’ and Polestar’s strong operational collaboration across research and development, manufacturing, after sales, and commercial will continue to the benefit of both companies
• The AGM’s resolution on the distribution of the Polestar Shareholding is conditional upon receipt of all necessary regulatory clearances, approvals and decisions on terms which, in Volvo Cars’ opinion, are acceptable by no later than on 5 April 2024. As at the date of this press release, the proposed distribution remains subject to receipt of regulatory approval in the United Kingdom. The outcome of such approval process in the United Kingdom will be made public by means of a press release in accordance with applicable rules and regulations
• The distribution of the Polestar Shareholding is proposed to be made by way of a share split (2:1), followed by an automatic share redemption process. Due to technical reasons, the Polestar Shareholding will be distributed in the form of Swedish Depository Receipts (“SDRs”), which represent the underlying ADSs in Polestar. Holders of such SDRs will be offered the possibility to convert the distributed SDRs into Polestar ADSs that can be traded on Nasdaq New York (see subsection “Technical information”)
• Volvo Cars has significant operational collaborations with Polestar and a financial relationship through the outstanding convertible loan of USD 1 billion. Thus, it is logical for Volvo Cars at this point in time to retain an ownership in and have influence over Polestar
• Further details can be found on https://investors.volvocars.com/en/the-share/polestar (subject to certain confirmations), and in the information brochure to be published no later than on 5 March 2024

[1] Based on 10.427 USD/SEK exchange rate.