Geely Auto set to raise capital to fund Volvo bid

• Source: Gasgoo.com
• [17:08 September 16 2009]
• Comments

Geely Auto, the Hong Kong-listed Chinese carmaker whose parent is eyeing Ford's Volvo unit, is set to raise capital through a bond issue to provide funding for a Volvo bid, Reuters reported today.

However, the bonds could also be used for Geely to expand its car making capacity rather than to launch an immediate bid for Ford's $2 billion plus Swedish car unit. Geely Holding Group Co. may work with Chinese state investment companies on the Volvo bid.

Geely Auto recently said it would buy the Volvo brand from its parent if the bid is a success, which would boost the profile of Geely, a small, homegrown carmaker and give it access to Volvo technology it needs to upgrade its cars.

The Hong Kong exchange said the Geely trading suspension today was pending a statement about plans to issue convertible bonds and warrants.

Geely, valued at around $1.68 billion, is working with British partner Manganese Bronze Holdings Plc to make and sell London's iconic black cabs in China.

In March, Geely bought the key assets of Australian gearbox maker Drivetrain Systems International for new technologies and overseas growth.