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Bank Freezes Loan for VW Factory in Poland
The European Bank for Reconstruction and Development has suspended €250 million ($274 million) in funding for a new Volkswagen AG van plant in Wrzesnia, Poland, sources tell Reuters.
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The European Bank for Reconstruction and Development has suspended €250 million ($274 million) in funding for a new Volkswagen AG van plant in Wrzesnia, Poland, sources tell Reuters.
The sources say the bank froze the deal after VW’s diesel cheating scandal surfaced in September. VW announced at the time it would revisit its investment plans to prepare for the costs, fines and legal settlements associated with fixing 11 million diesel vehicles rigged to evade emission tests. The crisis also raised VW’s borrowing costs.
The carmaker tells Reuters construction of the €1.1 billion ($1.2 billion) facility has already begun and adds the project will be completed. Reuters’ sources say the loan could be reinstated but would first be repriced.
The factory will employ about 3,000 workers and have capacity to make 100,000 VW Crafter vans.
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