Volvo Cars converts part of outstanding loan to Polestar into equity
Volvo Cars will convert part of its outstanding convertible loan to Polestar (Nasdaq: PSNY) into equity. The conversion price is based on a 5 per cent discount to the 30-day volume-weighted average price (VWAP) in Polestar shares.
As a result of the initial conversion of USD 274 million, Volvo Cars’ ownership in Polestar will increase from 9.8 per cent to 19.9 per cent. Volvo Cars’ initial conversion is expected to be followed by the previously announced approximate USD 300 million debt-to-equity conversion by Geely Sweden Holdings AB, which in that case will temporarily dilute Volvo Cars’ stake. Following such a conversion by Geely Sweden Holdings AB, Volvo Cars will carry out a second, smaller conversion of approximately USD 65 million to maintain its stake in Polestar to 19.9 per cent.
Both steps will be carried out at the conversion price set for the initial conversion. The initial conversion will take effect on March 31st, 2026, followed by the second smaller conversion expected during the second quarter 2026, provided that Geely Sweden Holdings AB’s conversion is completed.
Prior to the transactions, the total outstanding loan amounted to USD 1 billion, with maturity in 2028. Following the completion of the two conversions described above, the remaining outstanding loan is estimated to amount to USD 661 million, with USD 339 million having been converted into newly issued Class A shares in Polestar. In conjunction with the initial conversion, the loan’s maturity was extended to December 2031. The terms for those transactions are supported by third-party fairness opinions.
Volvo Cars has an important operational and commercial partnership with Polestar. Those conversions, where Polestar strengthens its balance sheet, serves the interests of both companies, and supports the successful continuation of the partnership. The transactions will not have any immediate short-term cash impact.
The conversions follow Polestar’s previously announced USD 1 billion equity funding rounds since December 2025 [link].
This disclosure contains information that Volvo Car AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 31-03-2026 08:45 CET.
