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April 13, 2010

CHINA: Geely Auto won’t help fund Volvo buy

Hong Kong-listed Geely Automobile has no plans to raise money to help finance the purchase by its parent of Ford's Volvo unit, the company's chief executive has said.

Hong Kong-listed Geely Automobile has no plans to raise money to help finance the purchase by its parent of Ford’s Volvo unit, the company’s chief executive has said.

“There have been rumours that the listed company plans to raise funds for its parent’s Volvo purchase,” Geely chief executive Gui Shengyue told Reuters. “But the company has no plan for such fundraising.”

He said Geely’s parent had already set up a company with a registered capital of CNY8bn (US$1.17bn) to partly fund the $2.8bn purchase.

“The parent company itself will pay CNY4bn and some partners will pay CNY4bn,” he said. “Other money [to finance the purchase] will come from Hong Kong, Europe and US banks.

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