Swedish auto firms secure European loans

Swedish car maker Volvo Cars, and truck makers Volvo Trucks and Scania, have secured loans totalling €1 billion ($1.26 billion) from the European Investment Bank (EIB), it was announced on Wednesday.

Volvo Trucks and Scania will receive €400 million each on Thursday and Volvo Cars will get 200 million euros, Sveriges Radio reported on Wednesay.

“If all the paperwork is ready and all the conditions are met, we will make the payments,” Mats Gunnarsson, an EIB advisor who is processing the loans, told the radio station.

The three companies are part of a group of eight auto firms whose EIB loan applications will be considered on Thursday.

Volvo Trucks, Scania and Volvo Cars have all applied for loans for projects aimed at developing new cleaner engines.

Gunnarsson said the EIB would not demand any guarantees for the loans to Volvo Trucks and Scania.

“These are two companies with very good credit-worthiness,” he stressed.

However, for Ford-owned Volvo Cars the EIB would demand guarantees from the Swedish state.

“For Volvo Cars we have been told that the government is ready to issue a state guarantee, even though the details aren’t wound up yet. In this case, it is a prerequisite for an EIB payment,” he said.

Gunnarsson said no decision had been made about a loan to Sweden’s other beleaguered car maker, General Motors-owned Saab Automobiles, which has launched a legal restructuring process in order to avoid bankruptcy after GM effectively abandoned the company to focus its own financial woes.

“There is still a great amount of uncertainty about whether (Saab) will receive state guarantees. We’re waiting for that uncertainty to be clarified,” he said.