Electric vehicle manufacturer Polestar has announced a $300 million equity raise designed to improve near-term liquidity and stabilise its financial structure. The move is supported by a parallel debt conversion from its principal shareholder, Geely Sweden Holdings, reinforcing long-term backing as the company navigates a difficult market environment.
European Lenders Lead Equity Investment
The equity funding is being split evenly between two European financial institutions. Banco Bilbao Vizcaya Argentaria (BBVA) and Natixis have each committed $150 million to the transaction.
As part of the arrangement, both banks have entered into put option agreements with a wholly owned Geely Sweden Holdings subsidiary. These options allow the investors to exit their holdings after three years, based on predefined financial return conditions. The structure provides Polestar with immediate capital while giving investors clarity on future exit rights.
Shareholder Converts Outstanding Debt
In a separate transaction, Geely Sweden Holdings has agreed to exchange roughly $300 million of outstanding debt for equity in Polestar. The amount includes unpaid loan principal and accrued interest tied to a term facility signed in November 2023.
The debt conversion is subject to regulatory approval. Once completed, it will reduce Polestar’s debt burden and improve its balance sheet by replacing liabilities with shareholder equity.
Pricing, Ownership Limits, and Liquidity
Polestar stated that after completion of the equity issuance, no participating financial institution will own more than 10 percent of the company’s total issued shares. The Class A American Depositary Shares to be issued have been priced at $19.34 per ADS.
The price was determined using the volume-weighted average trading price over the three months preceding the final agreements and adjusted to the nearest cent. Shares issued to BBVA and Natixis will be freely tradable, subject to applicable securities laws, with no lock-up provisions attached.
Transaction Timeline and Advisors
The company expects the equity transactions to close by 23 December 2025. Unlike the debt conversion, the equity issuance does not require regulatory approval. BofA Securities is acting as the exclusive financial adviser to Polestar for the equity raise.
Financial Results Frame the Strategy
The capital raise follows Polestar’s financial performance for the nine months ended 30 September 2025. Revenue rose to $2.17 billion, up from $1.45 billion in the prior-year period, reflecting higher vehicle deliveries and broader market presence.
However, net losses increased to $1.55 billion from $867 million a year earlier, highlighting ongoing cost pressures and competitive intensity within the global EV sector.
Commenting on the transactions, CEO Michael Lohscheller said the funding materially improves liquidity and strengthens the company’s financial foundation, while reaffirming Geely’s confidence in Polestar’s long-term direction.
At its core, the move gives Polestar breathing room, lower leverage, added capital, and greater flexibility as it works to sharpen efficiency and scale sustainably in a crowded EV market.
