Geely, Ford say on track for Q1 Volvo deal signing

17 March 2010 @ 09:52 am EDT

LONDON/HONG KONG - Zhejiang Geely Holding and Ford said they were still on track to sign a deal this month for Ford's Volvo cars unit, after a Chinese newspaper said Geely's planned $2 billion purchase faced hurdles.

Spokesmen for Ford and Geely said on Wednesday the plan remained to sign a sale and purchase agreement (SPA) by the end of this quarter, and to complete a deal in the second quarter.

Anders Fogel, a Stockholm-based spokesman for Geely, said the two sides were making progress "according to plan" on the three key issues of legal documentation, financing, and regulatory and governmental approvals.

Earlier, China Daily, citing sources familiar with the matter, said "unsolved obstacles and uncertainties" meant the two were yet to reach a definitive agreement and the Chinese firm faced financing and technology hurdles.

After the deal, Geely would have to spend at least $1.4 billion to finance car development and marketing, and whether the Chinese company would be able to secure the necessary funds was a major issue, China Daily added.

Zhejiang Geely is the parent of Hong Kong-listed Geely Automobile.

Geely, China's largest privately owned carmaker, had aimed to complete the purchase of Ford's Volvo unit for up to $2 billion by May, according to a document seen by Reuters. (Reporting by Alison Leung in Hong Kong and Quentin Webb in London; Editing by Don Durfee and Will Waterman)

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