Geely, the Chinese carmaker tagged as the preferred bidder for Ford Motor's
At least three major Chinese banks including Bank of China <3988.HK> <601988.SS>, China Construction Bank <0939.HK> <601939.SS> and Export-Import Bank of China had agreed to extend loans to Zhejiang Geely Holding Group, said the banking sources briefed on the plan.
Money is not a problem for Geely, said a source. They definitely have strong support from Chinese banks and there are a number of private equity funds queuing up to invest in Geely.
Export-Import Bank of China is a policy lender wholly owned by the Chinese government and directly led by the cabinet. Bank of China is China's top foreign exchange lender. China Construction Bank is the country's No.1 property lender.
The loans backing Geely's bid for Volvo are expected to have a five-year tenor, said another of the sources, who declined to be identified as they were not authorized to speak to the media.
Geely declined to comment.
All three banks involved declined to immediately comment on the matter.
Bohai Industrial Investment Fund, a private equity fund backed by the Chinese government, was also in talks with Zhejiang Geely Holding Group, the parent of Hong Kong-listed Geely Automobile <0175.HK>, to support its bid for Volvo, said the sources.
However, no agreement between Bohai and Geely had been reached and Bohai's investment would only be a small part of Geely's acquisition of Volvo, said the sources.
In September, Goldman Sachs
(Editing by Chris Lewis)
(Additional reporting by Quentin Webb in London, Alison Leung in Hong Kong, Fang Yan in Shanghai and Langi Chiang in Beijing)