(Yicai) Nov. 13 -- Chinese private automaker Geely Holding Group has refuted rumors suggesting an intention to reduce its stake in Swedish car manufacturer Volvo.

"As a long-term investor and controlling shareholder of Volvo, Geely has no plans to reduce its stake in Volvo," The Paper reported yesterday, citing the Hangzhou-based car firm.

Rumors surfaced on social media yesterday, claiming that Geely was considering selling additional Volvo shares to gradually boost its stock price. Both Geely and Volvo are reportedly concerned about their stock market performance, citing a limited number of freely tradable shares. The rumors suggested that increasing this number could attract more interest from fund managers and investors.

In March 2010, Geely acquired 100 percent of Volvo for USD1.8 billion. Under Ford Motor's ownership, Volvo had experienced losses, but it became profitable after Geely’s acquisition. In return, the Swedish automaker provided Geely with brand recognition and advanced technologies. The pair has proven to complement each other in both technology and supply chain.

The most recent Volvo stake reduction by Geely occurred a year ago. At that time, Geely stated that the small share offering was intended to increase Volvo's liquidity and create long-term value. Following the transaction, Geely retained 78.7 percent of Volvo's shares. The proceeds from the sale were used to support the global development of Geely's sub-brands.

For the third quarter, Volvo reported revenue of SEK92.8 billion (USD8.5 billion), a 1 percent year-over-year increase, and a net profit of SEK4.4 billion (USD400 million), up 35 percent, according to its latest financial report.

Editor: Emmi Laine