M&A

30 November, 2009

Geely taps China banks to back Volvo deal -sources

HONG KONG, Dec 1 (Reuters) - Geely, the Chinese carmaker tagged as the preferred bidder for Ford Motor's (F.N) Volvo unit, is seeking at least $1 billion in loans from Chinese banks to finance its $1.8 billion bid, sources said on Tuesday.

At least three major Chinese banks including Bank of China, China Construction Bank and Export-Import Bank of China have agreed to offer loans to Zhejiang Geely Holding Group, said the banking sources briefed on the plan.

Export-Import Bank of China is a policy lender wholly owned by the Chinese government and directly led by the cabinet. Bank of China (3988.HK) (601988.SS) is China's top foreign exchange lender. China Construction Bank (601939.SS) (0939.HK) is the country's No.1 property lender. Zhejiang Geely Holding Group is the parent of Geely Automobile (0175.HK), listed in Hong Kong.

Bohai Industrial Investment Fund, a private equity fund backed by the Chinese government, is also in talks with Geely to support its bid for Volvo, said the sources.

Geely declined to comment. All the three banks involved could not immediately offer comments for this article. (Reporting by George Chen and Prudence Ho; Editing by Jacqueline Wong) ((george.chen@reuters.com; +852 2843 6532; Reuters Messaging: george.chen.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

Source: http://www.reuters.com