Geely secures financing to buy Volvo

Chinese carmaker Geely has secured financing from Chinese financial institutes and regional authorities, for planned purchase of Volvo Cars from US auto giant Ford a report said yesterday.

"Financing for the Volvo deal was concluded in recent days," a source told the Swedish financial daily Dagens Industri .

"The money is now in Geely's bank account. Documentation has been shown to Ford and has been approved," said the source, described as "close to the matter".

In addition, DI reported, Geely had secured guarantees of financial support to cover possible future Volvo losses.

"Documentation on this has also been shown and approved by Ford," the source said.

It could still take time for the deal to be finalised as the parties still need to go over all the relevant documents and make sure they are in line with legislation in China, Sweden and the United States, DI said.

"This is a very complex and time-consuming process," DI's source said, adding that approvals were still needed from some of the relevant authorities.

Ford announced in late 2009 that it had agreed terms to sell its Swedish subsidiary Volvo Cars to Geely for a reported $2 billion.

If completed, the deal will bring to an end Ford's decade-long association with the Swedish brand.

According to reports, Geely does not plan to move production of Volvo cars to China.

Nonetheless, trade union leaders in Sweden have expressed fears that the deal with Geely will mean cuts at Volvo Cars, which has 22,000 employees worldwide, including 16,000 in the Scandinavian country.