GUANGZHOU -- Geely, China's largest private-sector automaker, reportedly is exploring a U.S. listing for its luxury subsidiary Polestar through a deal with a special-purpose acquisition company (SPAC).
The move, reported by The Wall Street Journal, citing unnamed sources, is part of a plan to raise Polestar's valuation to $40 billion, up drastically from an estimated $7 billion.
Polestar first looks to undergo a round of fundraising that would lift its valuation to $20 billion by the end of June, the report said. Polestar could merge afterward with a SPAC, a blank-check acquisition entity, in a deal that would add another $20 billion to the brand's value.
Polestar is a European electric vehicle brand picked up by Geely when it acquired Sweden's Volvo Cars. The EV brand is pouring resources into manufacturing automobiles in China for export back to Europe and is seeking to build a war chest to expand its sales channels.
Geely considers Polestar a strategic brand for competing against Tesla. Polestar handles the design at its headquarters in Sweden while the manufacturing of vehicles takes place in China. The Polestar 2 EV is being shipped to Europe, among other markets.
The major Chinese automaker, formally known as Zhejiang Geely Holding Group, is also in talks to back a SPAC that could raise $300 million through an initial public offering on the U.S. Nasdaq market, according to the Journal report first published Tuesday.
In response to the article, Geely said it conducts routine reviews regarding fundraising and capital structure and that the company will not comment on "rumors and speculation" in the media.