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VW Seeks €20 Billion in Bridge Financing for Emissions Crisis
Volkswagen AG will begin meetings today with a dozen banks to arrange as much as €20 billion ($21.5 billion) in short-term loans to help cushion the impact of recalling more than 11 million vehicles that don’t meet emission standards, sources tell Bloomberg News.
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Volkswagen AG will begin meetings today with a dozen banks to arrange as much as €20 billion ($21.5 billion) in short-term loans to help cushion the impact of recalling more than 11 million vehicles that don’t meet emission standards, sources tell Bloomberg News.
They say VW wants to have access to the funds to maintain liquidity, not to pay for vehicle repairs or buybacks. The company hopes to have the bridge financing in place by the end of 2015.
Bloomberg notes that VW’s automotive unit had nearly €28 billion ($30 billion) in liquidity at the beginning of October, two weeks after the emission scandal surfaced. The company described €10 billion of the total as a buffer to protect its credit rating.
Barclays plc estimates VW will spend about €25 billion on repairs and fines. The company admits it rigged 11 million diesels to cheat nitrogen oxides emission tests and says it manipulated carbon dioxide tests on 800,000 diesels to improve their fuel economy ratings.
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