Volvo Cars to ink €198 million loan
Sweden-based Volvo Cars is expected to get a capital injection backed by guarantees from the Flemish government.
Gothenburg-based Volvo Cars, that’s up for sale by its parent Ford Motor Company, is likely to ink a €198 million loan by the end of this year in order to stabilize its financing.
In an interview with Bloomberg during the Frankfurt car show, Volvo’s chief executive officer Stephen Odell said that the loan is 90 percent backed by guarantees from the Flemish government because the company is producing cars in Belgium. Volvo is seeking the remaining support from banks.
Volvo has also asked the Swedish government to back up a 500 million-euro loan from the European Investment Bank.
The suitors in a potential deal to acquire Volvo Cars from Ford are confidential, Stephen Odell said.
“The people that we’ve spoken with understand the Volvo brand and buy into it,” the he told Bloomberg.
Last week Geely Automobile, China’s biggest privately owned carmaker, said that its parent Geely Holding Group is mixed up in the bid for Ford Motor’s Volvo Cars unit. The Chinese company wants full ownership of Volvo rather than just a stake.
Stephen Odell expects the global car market to grow 7 – 9 percent next year. The company has increased its production with 10,000 vehicles to meet increasing demand.
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Last Updated (Tuesday, 15 September 2009 14:19)
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