Geely seeking at least $1 billion in loans from Chinese banks for Volvo deal
By Andrew C., 26 Aug, 2010. 0 Comments
2011 Volvo V60
At least three major Chinese banks have Geely back as it pursues its bid for Ford Motor Co. Volvo unit. Geely has already been named the preferred bidder but for the agreement to proceed, Ford had asked about Geely financing plans. Sources say that banking sources are the least of Geely problems as so far, Bank of China, China Construction Bank and Export-Import Bank of China had agreed to extend loans to Zhejiang Geely Holding Group. Export-Import Bank of China is a policy lender wholly owned by the Chinese government and directly led by the cabinet.
Bank of China is China's top foreign exchange lender. Lastly, China Construction Bank is the country's No.1 property lender. Sources add that Geely is seeking at least $1 billion in loans from Chinese banks to finance its $1.8 billion bid. Geely (translated as luck in Chinese) is keen on acquiring modern and innovative technologies from the Swedish brand Volvo in order to upgrade its cars and take advantage of the burgeoning car market in China.
With this goal in mind, Geely has strong support from Chinese banks. In addition, there are several private equity funds queuing up to invest in Geely. Initial talks took place last month between representatives of Ford and Geely. To date, all signs are pointing to Geely success at getting its bid accepted.
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