Chinese carmaker Geely has moved a step closer to acquiring Swedish brand Volvo Cars from US carmaker Ford Motor, after securing loans worth around US$1bn from three major Chinese banks – Bank of China, China Construction Bank and Export-Import Bank of China.
Bank of China is China’s top foreign exchange lender. China Construction Bank is the country’s No 1 property lender. Export-Import Bank of China is a policy lender wholly-owned by the Chinese government and directly led by the State Council.
“Money is not a problem for Geely,” said an unidentified source. “They definitely have strong support from Chinese banks and there are a number of private equity funds queuing up to invest in Geely.”
The funds would cover the majority of the US$1.8bn bid for the premium brand, although a final sale price has not been agreed. Geely has, however, been recognised as the preferred bidder for Volvo.
Geely is one of China’s top ten auto manufacturers and also among the country’s top 500 firms. The company operates six car assembly and power-train manufacturing plants in China located in Lanzhou (Gansu province), Linhai (Zhejiang province), Luqiao (Zhejiang province), Ningbo (Zhejiang province), Shanghai and Xiangtan (Hunan province). These facilities enable a production capacity of approximately 300,000 cars per year.