Volvo applies for massive European loan

Ford-owned Swedish car maker Volvo has applied for a 475 million euro loan from the European Investment Bank (EIB), the Swedish government said on Thursday.

“Volvo has requested a loan of around five billion kronor,” the government said in a statement, adding that a final agreement including Swedish state guarantees for the loan was expected to be concluded by March.

Maria Bohlin, a spokeswoman for Volvo Cars, confirmed the size of the loan requested by the firm and said: “The negotiations will continue until a decision is taken” by EIB, the European Union’s long-term lending institution.

Around three-quarters of a rescue plan for the Swedish car industry amounting to 28 billion kronor consists of Swedish government gurantees for loans from the EIB.

Ford announced on Thursday that Volvo Cars had a loss of $736 million in the fourth quarter.