© Reuters. A Volvo XC 90 car is seen during an interview with CEO Hakan Samuelsson at the Volvo Cars Showroom in Stockholm, Sweden July 5, 2017. TT News Agency/Jonas Ekstromer/via REUTERS/File Photo
OSLO (Reuters) – Shares of Swedish carmaker Volvo (OTC:) Cars fell 14% on Friday as its majority shareholder, China’s Geely, sold a small part of its stake at a sharp discount to the stock price. closing of the day before.
Geely launched a placement of 100 million Volvo Cars shares on Thursday, which the deal’s bookrunners said were sold after the market closed for about 37 Swedish crowns each, or $350 million in total. The stock closed at 40.84 crowns.
The sale of the 3.4% stake leaves Geely with a 78.7% stake in Volvo Cars, the Chinese company said in a statement.
“The placement will increase the free float and further expand the shareholder base of Volvo Cars. The profits received by Geely Holding are intended to be used to support business development within the group,” the statement added.
None of the money from the sale of shares went to Volvo Cars.
At 0900 GMT, Volvo Cars shares were down 10.2% at 36.66 crowns, after trading as high as 35.25 crowns.
Goldman Sachs, BNP Paribas (OTC:) and SEB were the bookrunners on the transaction, Geely said.
Geely Holding has committed to a 90-day hold period for its remaining stake, “subject to customary exceptions and waivers” from bookrunners.