Chinese Geely must take out a loan of as much as 18 billion Danish kroner to refinance its stake in Volvo AB.
Geely Holding has taken out a new loan of 18 billion Danish kroner to finance its stake in truck manufacturer Volvo AB.
Geely Holding, which owns the car brands Volvo Cars and Polestar, also has a significant stake in the truck brand of almost the same name.
According to reports from Bloomberg , it is a syndicated loan composed of money from 20 different banking connections.
The loan amounts to 18 billion Danish kroner. The purpose of the new loan is to refinance an existing three-year loan of 29.7 billion euros, which matures in May.
Geely Holding's ownership stake in Volvo AB amounts to 4.4 percent of the capital and 14.7 percent of the voting rights among shareholders.
Several car brands with debt must borrow several billion kroner
The economic value of Geely Holding's stake in Volvo AB is estimated to be worth around DKK 20 billion.
Geely Holding's activities include ownership of the car brand Polestar in addition to Volvo Cars. The company also has a stake in the Swedish truck manufacturer AB Volvo.
However, Geely Holding does not only borrow money itself. Its subsidiary Polestar also has to raise new capital to pay off 'old'/existing loans.
The loan comes just a few months after Polestar borrowed billions to keep the business running. Overall, the internal barter business is going well at the Chinese.
Last year, the car brand sold its entire stake in another sister brand back to the parent company.
At the same time, the ownership stake in Polestar shrank significantly. Read more about it here .
