According to some sources, some funds received by Volkswagen for building its new factory in Poland might by canceled.
The European Bank for Reconstruction and Development granted Volkswagen a 250-million-euro loan to help the automaker build a new factory in Poland, but it seems the consequences of the emissions cheating scandal are more extensive than company might conceive. The funding, agreed by the development bank board around the middle of the year, is now under questioning – two sources familiar with the insights of the matter told Reuters. The officials have revealed the financing project has been put on hold in the wake of the carmaker’s September disclosures. “It has been frozen,” one of the sources who spoke under the condition of anonymity said. “At the very least it (loan) is going to have to be repriced, but it could get pulled altogether,” he said.
The unconvincing way in which VW has managed the scandal so far, the unknown scale of the financial outcome and that of a cost-cutting plan and the rise in the carmarker’s own borrowing costs, all contributed to EBRD’s decision to freeze the Poland factory funding, he added.
The predicament is more sensitive for VW than it appears to be, as the building of the Poland factory has already been initiated and the total costs involved are summing 1.1 billion euros (1.20 billion dollars). However, a company spokesman in Germany wanted to clarify the issue by saying the factory would be completed. The upcoming production line in Wrzesnia, to the west of central Poland, is set to produce up to 100,000 of the brand’s new Crafter vans per year and employ around 3,000 people.