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Geely secures financing to buy Volvo: report

(Agencies)
Updated: 2010-03-11 09:35

The parent of China's Geely Automobile has secured financing to buy Ford-owned Volvo cars for about 15 billion Swedish crowns ($2.10 billion), a Swedish business daily reported on Wednesday.

Dagens Industri, citing sources, said that Chinese financial institutions and regional government bodies had provided the money for Geely to complete its purchase.

The paper quoted its source as saying that the money was already "in the bank account" of parent Zhejiang Geely Holding, (ZGH) which would also have offered guarantees to Ford about the financing of its business plan for Volvo.

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 $2 billion was proceeding on track.

The company, China's largest privately owned carmaker, had been aiming to reach a formal deal last month and complete its purchase by May, according to a document seen by Reuters.

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 plan put together by the company.