Geely, picked as the preferred bidder for Ford’s Volvo unit, is seeking at least $1 billion in loans from Chinese banks to finance a $1.8 billion bid, sources say.
Geely means “lucky” in Chinese. But with the bankers it has lined up, the company probably doesn’t need much in the way of luck. Bank of China, China Construction Bank and Export-Import Bank of China have agreed to extend it loans, our sources tell us. That’s about as mighty a banking syndicate as you can get in the People’s Republic.
“Money is not a problem for Geely,” said one source. “They definitely have strong support from Chinese banks, and there are a number of private equity funds queuing up to invest in Geely.”
Then there is the near-perfect timing for a Chinese automaker, looking for a technology upgrade on the cheap, to be shopping for one of the best known premium brands in the industry. Though Ford and Geely have not disclosed a possible sale price for Volvo, reports suggest it will be much closer to $2 billion than the $6.45 billion Ford paid for Volvo in 1999.