Geely, Goldman in talks on $250 mln bond deal

Shanghai, September 21 (Gasgoo.com) A private equity unit of Goldman Sachs Group is in talks with Geely Auto to buy about $250 million of the biggest privately-owned Chinese carmaker's convertible bonds and warrants, media reported today, citing sources.

"The two sides have basically agreed on the investment in Geely already, but have yet to work out some technical details," one source with direct knowledge of the deal told Reuters. Confirmation of the deal could be announced as early as this week.

Geely, whose parent is eyeing Ford's Swedish car brand Volvo, plans to use the proceeds of the $250 million investment to boost its production capacity, including tripling the annual output at its flagship car plant in the central province of Hunan to 150,000 units.

It will also buy auto-related assets from its parent, Geely Holding Group Co, said the source. The investment will result in Goldman Sachs Capital Partners owning a minority stake of about 15% of the Hong Kong-listed Geely Auto, the Financial Times said. 

Geely Auto said earlier this month its parent was considering a bid for Volvo with a local government-backed investment firm. Its executive director later told Reuters the bonds and warrants were not related to Volvo.