Geely's Volvo purchase still on track

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A Geely automobile is getting down the line. [CFP]

A Geely automobile is getting down the line. [CFP]

Chinese auto maker Zhejiang Geely Holding Group said it is still on track to buy car maker Volvo from Ford Motor Corp, indicating an agreement is expected to be concluded within seven days.

Yuan Xiaolin, a spokesman of the Chinese private car maker, said Geely is sticking to its original plan to sign the purchase deal by the end of this month despite earlier media reports saying fund-raising difficulties and technical disputes with Ford may lead to a collapse in the deal.

"We have received tremendous attention regarding the deal but we did not change our schedule (to move the deal forward)," Yuan told Shanghai Daily, declining to provide details.

At the end of last December, Ford agreed on all major commercial terms with Geely to buy its money-losing Swedish marque. Both car makers expect to sign the deal in the first quarter of this year, with completion in the second quarter.

A Financial Times report yesterday said that Ford may sign the deal with Geely as early as Sunday during the visit of Chinese Vice President Xi Jinping to Sweden. The report quoted anonymous sources as saying Geely will pay US$1.8 billion for Volvo and pump in an additional US$750 million as working capital.

It is reported that Geely has secured 8 billion yuan in loans from Chinese banks to facilitate the deal and the rest will be provided by European banks.

If the deal goes through, it would be the biggest overseas acquisition for a Chinese auto company of a premier brand for the first time.

For Geely, which is diversifying from low-price compact cars to higher-end autos, buying Volvo would help to improve its technological capability and to tap the global market.

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