Volvo Group has entered into an agreement to divest a Chinese subsidiary holding shares in Inner Mongolia North Hauler Joint Stock

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Volvo Group Press Release  /  March 26, 2018

Volvo Group has entered into an agreement to divest a Chinese subsidiary, which is holding 25.2% of the shares in the Chinese company Inner Mongolia North Hauler Joint Stock Co., Ltd (NHL / 内蒙古北方重型汽车股份有限公司 - http://www.chinanhl.com/) for approximately SEK 0.9 billion.

The transaction is subject to regulatory approvals and could be terminated by either party if regulatory procedures or changes in regulatory rules or laws preclude the parties from completing the transaction.

The divestment is expected to generate a capital gain of approximately SEK 0.7 billion, which will affect the Volvo Group’s operating income when the transaction is closed. Closing of the transaction is expected within six months.

The divestment will impact the Group’s cash flow and net financial position positively with an amount of approximately SEK 0.9 billion at closing. NHL, which is listed on the Shanghai Stock Exchange, produces and sells among other things rigid haulers to the mining industry.

Volvo Construction Equipment will continue to sell components for rigid hauler production to NHL also after the divestment.