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EIB Bans Further Loans to VW Because of Diesel Scandal
The European Investment Bank says it will extend no further loans to Volkswagen Group until it can confirm the carmaker didn’t use a portion of previous loans for work on systems designed to cheat diesel emission tests.
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The European Investment Bank says it will extend no further loans to Volkswagen Group until it can confirm the carmaker didn’t use a portion of previous loans for work on systems designed to cheat diesel emission tests.
The EIB’s most recent loan to VW for €400 million was paid off in 2014. The bank says it expects to decide within a year whether to permit new loans to the company.
Last month sources told Reuters VW had arranged a bridge loan for €20 billion ($21.7 billion) from 13 commercial banks. The funding is intended to help cover costs related to fixing 11 million diesels the company rigged to evade emission laws.
VW said in December it believes repairs for the affected vehicles will cost no more than the €6.7 billion ($7.3 billion) it has budgeted. But the company has not yet reached agreement on how to fix affected diesels in the U.S. Analysts say regulatory fines and lawsuit settlements are likely to significantly multiply that amount.
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