The fact that these bidders exist and one of them will get hold of Volvo by the end of the year is beyond doubt. What is uncertain is what role Geely will play, if any, in the future of the Swedish manufacturer.
Conflicting reports about the Chinese's intentions have been around for some time now. Today's news is no exception. Geely has denied any interest in acquiring Volvo in a stock exchange filing in Hong Kong. "The company has not submitted, and has no plans to submit, any bids concerning the takeovers of Volvo or Saab as stated in recent press articles," said the filing, as cited by Reuters.
Until the dust settles on the Geely affair, Volvo hoped to operate under the cover of a 200 million euro loan, approved in March by the European Investment Bank (EIB) and backed by Sweden. Unfortunately for the manufacturer, Sweden has postponed discussions on the government guarantees.
"We are disappointed that we have not been able to come to an agreement," Volvo CEO Stephen Odell. was quoted as saying by Autonews. The main reason behind the postponement is the fact that the Swedish government demanded Volvo a long term commitment in turn. Due to the uncertain future of the company, Volvo declined the plan.
"As I interpret this, Volvo will come back to the government when this strategic overview and the picture regarding a potential new owner becomes clearer," Magnus Thor, head of the national debt office's guarantee and loan department told the source.