* Sets IPO price at 53 crowns per share
* Plans to raise 20 bln crowns ($2.3 bln ) in IPO
* Valuation of business just over $18 bln
* To start trading on Nasdaq Stockholm on Oct. 29
(Adds CEO, analyst comment, background)
STOCKHOLM, Oct 25 (Reuters) - Volvo Cars shrank its initial
public offering on Monday, pricing it at the bottom of a
previously announced range and valuing the Geely-owned
business at just over $18 billion.
European and U.S. IPO markets have been hit by cancellations
as inflation and global supply chain crunches have increased
stock market volatility, while many more companies are reported
to have pushed back plans rather than risk U-turns.
Volvo Cars, which had previously said its IPO would be
priced within a range of 53 crowns ($6.2) to 68 crowns per
share, said it was now opting for 53 crowns.
Carmakers have been hurt by production disruptions due to a
semiconductor shortage, with several cutting production targets
and shutting factories on concerns it will run well into 2022.
At the current price, Volvo Cars would be valued at just
over $18 billion, well below the $23 billion it had expected at
the top of the IPO pricing range.
Volvo Cars said it plans to raise around 20 billion Swedish
crowns ($2.3 billion), down a fifth from its previous target.
CEO Hakan Samuelsson said he was "totally convinced" this
would be enough, while the price should not be seen as negative.
"We have been listening to the market, humbly," he told news
Political tension between Beijing and Stockholm persist
after Sweden banned Huawei from its 5G networks and Swedish
companies like Ericsson have lost business in China.
Geely, which paid Ford $1.8 billion for Volvo Cars in
2010, would not exercise an over-allotment option, while the
amended offering would result in a free float of 16% to 17.9%.
Handelsbanken analyst Hampus Engellau said Volvo Cars had
been careful to get secure all institutional Swedish investors.
"I would rather have seen a bigger share of the company
listed to get a larger owner base and a liquid share... now
we'll have a smaller share listed, which is somewhat
unfortunate," he said.
Volvo Cars said the first day of trading on Nasdaq Stockholm
was expected on Oct. 29, a day later than previously announced.
($1 = 8.5737 Swedish crowns)
(Reporting by Helena Soderpalm and Supantha Mukherjee in
Stockholm, Abhinav Ramnarayan in London; Editing by Niklas
Pollard, Emelia Sithole-Matarise and Alexander Smith)