Volvo Cars has announced its plan to distribute 62.7% of its stake worth $920.17 million in Polestar Automotive Holding, the Swedish electric vehicle manufacturer, to its own shareholders, Reuters reports.

Following the proposed distribution, Volvo Cars will retain an 18% stake in Polestar. 

President and CEO of Volvo Cars Jim Rowan stated that it is logical for the company to retain influence through a smaller 18% stake in Polestar, given the significant operational collaborations and financial relationship between the two companies. Volvo Cars has an outstanding convertible loan of $1 billion with Polestar. 

Geely Holding, which is a majority owner of Volvo Cars, will continue to provide operational and financial support to Polestar.

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