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China offers Volvo millions new loan deal

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China offers Volvo millions new loan deal
07:33 CET+01:00
Car maker Volvo, the Swedish subsidiary of China's Geely Group, announced on Monday it had signed a second loan agreement with the China Development Bank as it aims to boost sales in the Chinese market.
The $800 million loan, with a maturity in 2021, "will support Volvo Car Group in further developing its product programme as well as strengthening the capital structure over the coming years," the company said in a press release.
 
The previous $922 million loan from the state-owned bank helped the firm pay back in advance another loan with the European Investment Bank.
 
Volvo, which has sustained losses since 2011, has high hopes for the Chinese market.
 
The company is about to start production in its second and third Chinese factories, and the Asian country will soon become Volvo's largest national market ahead of the United States, where sales are dropping.
 
China Development Bank is the first creditor of the company, which on June 30th this year had an approximate total debt of 9.5 billion kronor ($1.44 billion) with financial institutions.
 
Volvo was purchased by Geely in 2010 and hopes to double sales in the Chinese market by 2020. China has been Volvo's largest market for the past two months.
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