Volvo has postponed talks with the Swedish government on state guarantees for loans from the European Investment Bank (EIB).
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“After a long period of negotiations regarding guarantees for an EIB loan, Volvo Car Corporation and the Swedish government have jointly decided to postpone the discussions on the state guarantees,” the company said in a statement cited by Reuters. “This is due to the strategic review being carried out by Ford, which could lead to a sale of Volvo Car Corporation.”
In March, EIB granted Volvo Cars a loan of EUR200m (US$266m) provided the carmaker could secure loan guarantees from Sweden. The loan would be used to develop new environment-friendly vehicles.
Last December, Sweden reserved SKR20bn ($2.5bn) for such loan guarantees to aid Sweden’s ailing auto industry.
“We are of course very disappointed we have not reached an agreement”, Volvo Cars chief executive Stephen Odell said in the statement, adding Sweden’s decision would mean other European carmakers, which, unlike Volvo Cars, have received government loan guarantees, now would have a competitive advantage.
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By GlobalDataVolvo Cars said it would now focus on other government sponsored initiatives such as support for research and suppliers, Reuters added.
