Polestar owes more than the brand is worth. On Wednesday, the brand announced that Volvo can first get a loan of 6.5 billion. kroner back in 2028.
Polestar right now owes more than the brand is worth. Therefore, the management announced on Wednesday this week that it cannot repay a gigantic loan from Volvo of 6.5 billion Danish kroner.
In any case, it cannot happen before 2028 at the earliest. This is what Polestar writes in a statement to the American Financial Supervisory Authority, which regulates the stock exchange in New York, where the brand's shares are traded.
The debt to Volvo should actually be out of the world by June 2024 at the latest. But at the end of last year, Volvo, which at the time owned just under 50 percent of Polestar, postponed it to June 2027.
Since then, Volvo's ownership share has shrunk to 18 percent. Instead, it is both brands' parent group, Geely, that has taken over control. Meanwhile, Polestar's share value has fallen by 90 percent, and on January 1, 2025, the brand may even be delisted.
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Now it is so clear that Polestar owes more – about 37 billion Danish kroner – than the brand is worth. The market value is DKK 12.1 billion. In other words, there is simply no money to repay the loan within the deadline.
On the other hand, the loan that Volvo has given Polestar is a so-called convertible loan. Which means that the debt can be made as from ready money to shares.
However, the management at Polestar is not about to panic. On the contrary, managing director Thomas Ingenlath is convinced that the share currently has a particularly attractive value.
Earlier this year, the German CEO took up the discussion with the other users of the social network LinkedIn. On his profile he wrote, among other things:
– Polestar is here to stay. All our 170,000 customers can rely on the fantastic service, guaranteed parts supply through our network of over 1,000 workshops in the 26 markets where we operate.
Right now Polestar's share is worth less than one dollar. This is otherwise the requirement to be traded on the stock exchange in New York. However, it is not certain that Polestar will go out of business – or be delisted as it is called – even if the brand exceeds a deadline of 2 January 2025. Read more about it here .
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