Sweden-based Autoliv Inc., the world's largest maker of air bags, may not complete a share buyback to maintain the liquidity of the shares, which have gained 44 percent this year, chief executive Lars Westerberg said Thursday.
Autoliv, which has several operations in northern Utah, has permission from its shareholders to repurchase 11.8 million of its own shares, Westerberg said in an interview in Frankfurt. The company has 94.4 million shares outstanding, according to Bloomberg data.
"Someone on Wall Street told me don't buy back too many because many funds need a certain liquidity to be interesting," said Westerberg. "The fewer shares you have outstanding, the less interesting you become."
Autoliv last October resumed a share buyback because of the low share price, Westerberg said. The shares fell to a low of $13.90 on Sept. 21, 2001, in New York.
The company's debt to equity ratio is "too good" at the current level of 29 percent and it doesn't want to reach a level of 40 percent, he said. The company has chosen dividend payments as a way to "give back money we don't need."
Westerberg declined to say what percentage of profit Autoliv plans to pay shareholders for this year.
Autoliv generates about a third of sales in the U.S. and is winning more customers as stricter traffic-safety regulations come into effect.