Geely Seeks $1 Billion from China Banks to Buy Volvo
By Michelle Krebs December 1, 2009Ford's sale of Volvo to Chinese automaker Geely appears to be edging toward completion, 
as major hurdles are cleared.
Geely, the preferred bidder for Ford's Volvo unit, reportedly is seeking at least $1 billion in loans from Chinese banks to finance its bid for the Swedish auto company.
At least three major Chinese banks including Bank of China, China Construction Bank and Export-Import Bank of China had agreed to extend loans to Zhejiang Geely Holding Group, parent of the auto company, banking sources briefed on the plan told Reuters. Those same sources said Geely has strong support from the banks.
Last week, Geely and Ford cleared a major hurdle - one over intellectual property rights. The deal calls for Volvo to keep those rights.
Sources told Reuters the remaining issue involves the future strategy for Volvo sales and production.
Geely, which means "lucky" in Chinese, wants for modern and innovative technologies from the Swedish brand to upgrade its car lineup and tap the auto market in China. Geely makes such models as the Free Cruise and the Kingkong.
Ford and Geely have not disclosed the sale price for the Volvo but speculation puts it at close to $2 billion. Ford paid $6.45 billion for Volvo in 1999.
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It will be interesting if this deal does go through. I feel the Chinese car makers are just waiting to explode all over the rest of the world. In China it is absolutely amazing how many different makes and models are available that are virtually unknown in the states.
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