• Sweden edition
 

Geely secures Volvo purchase finance

Published: 10 Mar 2010 11:41 GMT+01:00
Updated: 10 Mar 2010 11:41 GMT+01:00

Chinese car maker Zheijiang Geely Holding Group is a step closer to becoming the new owner of Swedish firm Volvo Cars after announcing that it had secured the 15 billion kronor ($2.1 billion) in required financing, a report said on Wednesday.

"Financing for the Volvo deal was concluded in recent days," a source told

Swedish financial daily Dagens Industri (DI).

The funds are now in Geely's bank account, and Ford has witnessed and approved documentation, according to DI's source.

It could still take time for the deal to be finalised as the parties need to go over all the relevant documents and make sure they are in line with legislation in China, Sweden and the United States, DI said.

"This is a very complex and time-consuming process," DI's source said, adding that approvals were still needed from some of the relevant authorities.

The backers of the deal are reported to be Chinese financial institutions and regional authorities which have secured the financially strained Chinese firm's purchase of Volvo Cars.

Ford announced in late 2009 it had agreed terms to sell its Swedish subsidiary Volvo Cars to Geely for a reported $2 billion.

If completed, the deal will bring to an end Ford's decade-long association with the Swedish brand.

While Geely has denied that production will be moved from Sweden to China, it has previously unveiled plans to establish a factory outside of Beijing with a production capacity of 300,000 cars.

Nonetheless, trade union leaders in Sweden have expressed fears that the deal with Geely will mean cuts at Volvo Cars, which has 22,000 employees worldwide, including 16,000 in the Scandinavian country.

An agreement for Geely's takeover of Volvo Cars is due to be undersigned during March, and the actual takeover is anticipated to be completed at some point before the end of June.

TT/AFP/The Local (news@thelocal.se)

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Your comments about this article

12:44 March 10, 2010 by BIL101
well done! Geely, keep going ahead!
13:12 March 10, 2010 by Eagle63
Sad....

Luckily Saab didn't end up in Chinese (or worse) hands... Can't wait for the all-new Spyker-Saab 9-3 in a year or two !!
17:12 March 10, 2010 by Volvo D
IF this deal goes through it will be the worst days in Volvo's history. WHAT CAN GEELY BRING TO THE TABLE?! This company has NO credibility. Their products are unsafe, unreliable, and have no quality or environmental care...the COMPLETE OPPOSITE of Volvo products, and now these could be the guys calling the shots? THEY ALSO have NO experience in running an international company, let alone a European international company. The Chinese automakers do not inovate, so they have no use to keep expensive Volvo technicians or unions. The Swedish automomile industry cant be saved by small players like Spyker-Saab alone. Volvo needs to remain Swedish. Chinese ownership will water down the brand, production will eventually be moved out of Sweden altogether, and Geely will have succsesfully raped what was once a proud and brand rich company. Shame on you Ford, you Volvo!
19:54 March 10, 2010 by square
Volvo D, although i can't say i know full details i feel your comments are spot on. Having a comapny whose focus is on cost down taking over a culture of safety at all costs does not seem like a winning combination. Only time will tell i suppose.
15:31 March 11, 2010 by karex
@square and Volvo D

I also agree. However, if your prediction turns out to be correct, poor quality cannot be attributed solely on the prospective new owners - they would just be accelerating what Ford began 10 years ago. The Volvo automobile has not been a real Volvo ever since Ford bought them. It's been just a shell for quite a while.
04:04 March 12, 2010 by porksteak
Very disappointing.
16:08 March 12, 2010 by Luke35711
If this is the new reality, we ought to work constructively to make the best of it! Being negative from the start won't help anybody.
01:41 March 13, 2010 by zhqwang
I wish that Sweden people buy Volvo car for long because you love it whenever. I think that you can see the beautiful future for Volvo car because you don't underestimate the abibility of chinese people. Do you know the president of Geely predicted that Geely bought when Ford bought Volvo about 10 years ago.
20:30 March 14, 2010 by E J
Thgat is really very SAD for us Volvo admirers in thge world. I own a 1966 Amazon 121 with 71,600 original kilometers and have had others newer. I really hope Geely will keep the brand at its original level of reliability and security, but frankly have doubts. From Lima, Perù, regards for averyone.
20:16 March 15, 2010 by Marvino
My dear zhqwang:

We all admire the ability of chinese people. We only have doubts about what the Chinese Government will do if Volvo ends up to be a Chinese enterprise. Geely says a lot of things about what they intend to do with Volvo, and dream a lot about their glory and future. But I wonder whether they understand that they will never really call the shots in any major decision, because the Government is backing their loan to buy Volvo. They stated they will keep the management and production structure in Sweden. But will they really be able to keep their promise when the bosses in Beijing tells them that it is in CHINA's people interest to replace the Swedish management with Chinese experts in car production ?

Think about it, and respond if you want. I am curious to hear what you have to say.
00:18 March 16, 2010 by zhqwang
Goverment of China supported the priate companies for long because they employ at least .25billion persons in their companies. The private companies assumes sole responsibility for its profits, the goverment don't interven them .The leaders of China know the private companies are good ,and very competitive, and they also knew that the state-owned companies are not bad but poor competitive. But the leaders are more clever than me, may than you. Then pay more attention to overall situation. Do you know that the population of a big city are more than your country, this are practical China.There are many policy to protect the priate comanies in my country.

I am very afraid that the sale of Volvo is being bad when Geely bought it even if the cars are made in Sweden.
05:37 March 16, 2010 by Marvino
zhqwang, I frankly fail to understand what the size of big Chinese cities has to do with the sale of Volvo. Can you explain ?
08:16 March 16, 2010 by zhqwang
it is very difficult for me to upload.

Afternoon, I printed too much, but upload function don't work. What you saw is my simply version. Just now ,I printed some but don't upload owing to poor upload.

you can contact me by zhqwang"at"hotmail.com
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