Geely seeks over two billion euros loan to refinance Volvo truck deal

CHINESE billionaire Li Shufu’s Zhejiang Geely Holding Group is in talks with banks for a syndicated loan to refinance borrowings related to its acquisition of a stake in Volvo in 2018, according to sources familiar with the matter.

The facility could be for more than two billion euros (S$2.9 billion) and launched into syndication as early as this month, said the sources, who asked not to be identified because the matter is private.

The loan discussion comes as the automaker, one of China’s biggest, accelerates its shift towards a more upscale product portfolio, seeking to boost profitability as it ramps up efforts to compete with local peers in electric vehicles.

Geely became a major holder of Volvo, a Swedish manufacturer of trucks, buses and construction equipment, six years ago after buying a 100 per cent stake in Volvo Car in 2010 from Ford Motor, further expanding its international presence.

Geely has lowered its stake in Volvo this year. It sold US$1.3 billion of the truckmaker’s shares in April, though it remained as the second-largest shareholder.

A handful of international banks are expected to lead the financing, which has not been finalised and could change as negotiations continue, the sources added.

Geely declined to comment on internal business matters, in an e-mailed statement to Bloomberg. BLOOMBERG