Swedish automaker Volvo Cars is now seeking a bigger European Investment Bank (EIB) loan than it earlier planned. Instead of 500 million, Volvo wants 600 million euros ($758 million) from the EIB, which is the European Union's long-term lending institution.
Volvo, whose parent is Geely Automobile, said last Tuesday that talks have resumed with Sweden about a government guarantee for the EIB loans to create environmentally friendly vehicles.
In March 2009, Volvo was granted an initial 200 million euro loan. However, Geely’s takeover placed talks about a guarantee on hold before the deal was completed. Volvo spokesman Per-Ake Froberg said that the timeframe is now different.
Rather than from 2009 to 2012, the projects would now run from 2010 to 2013. This affects the amount that it intends to borrow. Geely recently completed the purchase of Volvo from Ford Motor Co., paying $1.3 billion in cash and issuing Ford a $200 million note.
Earlier this year, Geely said that it is still open to a possible EIB loan although it had all financing prepared for the takeover of Volvo, the largest overseas purchase by a Chinese firm in the automotive sector. [via autonews - sub. req]