STOCKHOLM: Sweden's Veoneer said on Monday it would seek up to $500 million in new capital to help the maker of electronic car products cope with a downturn in the vehicle market and fund new product development.
Shares in the company, which makes radars, visions systems, advanced driver assistance software and autonomous drive software that will benefit from driverless vehicle development, had fallen 16.7 percent to 211.50 Swedish crowns ($22.26) by 0949 GMT.
Veoneer has suffered as carmakers have extended their timeline for the mass adoption of self-driving vehicles and robotaxis due to regulatory and technological challenges and due to a slide in conventional car sales needed to fund development.Veoneer's fund raising would dilute holdings of existing shareholders by up to 17.6 percent, based on its U.S.-listed market capitalisation of $2.34 billion at Friday's close.
Analysts had expected Veoneer to seek more cash after the loss-making firm pushed back 2020 sales and margin targets in October, partly blaming production delays at car manufacturers.
Veoneer was reviewing its targets, CEO Jan Carlson said after the company said it needed fresh capital to meet research and development costs and deliver against a big order book.
"We have a strong base for the future, with possibly one of the largest order books in the industry," Carlson told Reuters. "But we are a small company when it comes to sales, and therefore very sensitive to a declining car production."
Veoneer said the decline in car production in the first quarter had been worse than expected, meaning it now saw 2019 organic sales declining compared to 2018, versus previous guidance of flat to slightly lower like-for-like sales.
The company, which reported quarterly operating loss of $128 million, said its order book at the beginning of 2019 was more than $19 billion, compared to about $16 billion a year earlier.