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Volvo’s message comes five days after Tillväxtverket announced that it will not pay money in crisis support to companies that generate large stock dividends, if they leave simultaneously.
READ MORE: The Growth Agency stops supporting companies that generate dividends
In a press release sent by AB Volvo, nothing is mentioned about Tillväxtverket’s message.
AB Volvo announces that the dividend proposal, which had meant a total of SEK 11.7 billion in dividends for shareholders, has been withdrawn due to the uncertainty that the corona crisis currently entails for the business.
READ MORE: AB Volvo halts production – leaves 20,000
“The Volvo Group has a strong financial position. However, there is general uncertainty created by COVID-19 and the effects on the Volvo Group of measures taken in different countries to curb the spread of the virus. As a result, the Board considers it appropriate a precautionary withdrawal of the dividend proposal “, the company writes in a press release followed by a comment from the Chairman of the Board, Carl-Henric Svanberg.
– Therefore, the Board considers it appropriate to be cautious in ensuring the long-term development of the company and its ability to act on the basis of a position of strength during the crisis.
READ MORE: Thus SKF got stuck with its dividends
20,000 short-term licensed employees
On March 20, AB Volvo announced that all of its approximately 20,000 employees were short-term in Sweden, of which just over 12,000 are employed in the Gothenburg region.
These are employees in all business areas: trucks, construction equipment, buses, and boat engines. The agreement was signed for ten weeks.
In mid-April, the company announced that it would extend short-term permits until September 22.
When the GP asked the AB Volvo press officer, Claes Eliasson, if the listing dividend had anything to do with Tillväxtverket’s message last week, he responds:
– This is a decision of the board. Actually, so I can only refer to what is in the field of the press. This is the Board’s general assessment of the situation and what they are referring to is that it is a very uncertain situation and in order to safeguard the company’s cash and be able to operate from a position of strength, this decision has landed.
At the same time, the announcement of a listed stock dividend comes just five days after the Swedish Growth Agency announcement.
– Our board meetings have been planned for a long time and it is at board meetings where this type of decision is made and we put in place a program for board meetings for a whole year, it is more of a drain if the things happen all over the world.
The press release states that the list dividend is a precautionary measure. How long does AB Volvo manage with current cash?
– We also have income, we have cash and income. It is very difficult and very speculative to get into a situation about it. We have a very strong cash and liquidity position, but there is great uncertainty about the new normal situation and therefore the Board decided that it would not be appropriate to distribute this money now, says Claes Eliasson.
READ MORE: Volvo is laying off employees until fall
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