Swedish Government Ready to Give Volvo Guarantee Loan
text size: A- A+
According to Autonews, Sweden's government has finally decided to guarantee a loan for Volvo. Joran Hagglund, Sweden's state secretary, reported that the government is due to approve an application from Volvo Cars likely to be filed to the European Investment bank (EIB) next month.
Thus, the government intends to guarantee 90 per cent of a 5-billion-kronor (573 million dollars) loan, while the remaining 10 percent should come from other sources.
Unfortunately, this does not apply to Saab that has also asked for government help. Furhermore, GM's Saab filed for court protection from creditors on Friday and is now fighting to survive as the Detroit automaker intends to sell it until January next year.
"Unlike GM, Ford has clearly stated they will take full ownership responsibility and guarantee capital flows to Volvo Cars until they have found a new owner for Volvo Cars," Hagglund was quoted as saying.
The Swedish government earlier stated that it was considering offering support to the struggling Saab manufacturer in case the company found an investor to back up the loan. Saab has already revised its production plans and expects low production levels in the near future but no one seemed interested in buying it so far.
As for Volvo, the car maker doesn't expect an easy year despite the good news that the government intends to help it by providing a guarantee loan. Sales for Volvo cars fell dramatically in 2008 and there are no bright perspectives for this year either. In addition, Ford announced it would sell Volvo for nearly $10 billion to anyone who is eager to pay the price...
UP NEXT: Mitsubishi Smiles Again, Increases Production for One Month Tip: navigate with ← and →
Cars we've tested recently
all testdrives →