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March 10, 2010

CHINA/SWEDEN: Geely has money in the bank for Volvo – report

Zhejiang Geely Holding has secured financing to buy Volvo from Ford, according to the Swedish daily newspaper Dagens Industri.

Zhejiang Geely Holding has secured financing to buy Volvo from Ford, according to the Swedish daily newspaper Dagens Industri.

The newspaper, citing unnamed sources, said that Chinese financial institutions and regional government bodies had provided the money for Geely to complete the purchase understood to be worth SEK15bn (US$2.1bn).

It added that the money was already “in the bank account” of ZGH, parent company of Geely Autombilers.

Earlier this week, ZGH said it had yet to sign an agreement in its ongoing bid for Volvo cars, though its plan to buy the brand for $2bn was on track.

Geely is China’s largest privately owned carmaker and had planned to reach a formal deal last month and complete its purchase by May, according to a document seen by Reuters. That deal is expected now to be signed by the end of this month.

Geely plans to nearly double Volvo’s annual global production with a new factory in Beijing to pull the Swedish automaker out of the red by 2011, according to a company plan.

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