HONG KONG (Dow Jones)--Geely Automobile Holdings Ltd. (0175.HK) said Thursday it is looking at ways to cooperate with Volvo Cars after its parent company completes the acquisition of the Ford Motor Co. (F) unit, and added that Volvo will likely remain a separately managed brand for now.
Gui Shengyue, chief executive of Geely Auto, the main unit of Zhejiang Geely Holding Group Co., said injecting the Volvo operation into the Hong Kong-listed firm remains the parent's ultimate goal after it buys the firm, but said no timetable has been set.
"The group intends to separately develop the Geely and Volvo brands until an appropriate time when we might combine their operations," Gui told reporters after a Geely shareholders' meeting.
He said Zhejiang Geely wants the shareholders of its listed unit to "reap the benefits" of the Volvo assets when the unprofitable Swedish brand turns around, but didn't elaborate.
Zhejiang province-based Geely Group is China's largest privately owned auto maker by sales. Geely Group injected nearly all its stake in the company's core car-making operations into the listed unit last year.
Ford said last week it settled "substantial commercial terms" of the proposed sale of Volvo Cars to Geely Group. Though financing of the deal and government approvals have yet to be completed, Ford said it expects a definitive agreement to be signed in the first quarter of 2010 and the sale finished by midyear.
Geely Group plans to finance the Volvo bid of around $2 billion with a combination of cash, bank loans and funds from a small number of investors, people familiar with the discussions said earlier.
Gui said Thursday he doesn't see major problems in securing adequate financing to acquire Volvo Cars. He added that the Chinese government has given "strong support" to the proposed acquisition plans.
