Geely Automobile Holdings Ltd. will delay the planned IPO of Swedish automaker Volvo Cars due to trade tensions between the U.S. and China, Volvo's CEO Hakan Samuelsson told the Financial Times (London).
Volvo Cars' Chinese owner, Geely, had been planning to float the company before the end of 2018 and was confident of achieving a valuation of about $30 billion, the newspaper said, but has since become concerned that the trade disputes would knock Volvo's share price.
"It is still an option, a very realistic option, but will not happen immediately," Samuelsson told the FT. "The timing has to be optimal."
Samuelsson added that "conditions right now are not optimal to give certain upside for the investors."
Bloomberg News reported in late July that early feedback from institutional investors showed that they valued Volvo Cars at between $12 billion and $18 billion, much less than the company's own estimates.
Since early July, the U.S. and China have slapped billions of dollars of import tariffs on each other, impacting automakers when they sell cars in China that have been assembled and shipped from the U.S.
Shares in Geely trading on the Hong Kong Stock Exchange ended 2.76% lower on Monday at HK$14.78.
Representatives at Geely could not immediately be reached for comment by S&P Global Market Intelligence.