Geely may use Goldman funds for Volvo bid

Shanghai, September 24 (Gasgoo.com) Chinese auto maker Geely Automobile Holdings, whose parent is considering a bid for Volvo Car Corp, said on Wednesday that it may use some of the funds raising from the bond sale to Goldman Sachs Group Inc. -managed fund for acquisitions.

Geely said in a statement that it was selling bonds and warrants worth a total of 2.59 billion Hong Kong dollars (US$334 million) to GS Capital Partners VI Fund, a private equity fund controlled by the US investment bank. GS Capital Partners VI Fund will own 15.1 percent of Geely should it convert the bonds and exercise the warrants.

Geely Auto said it plans to use the funds for capital expenditures and potential acquisitions. Geely Auto's parent company is bidding for Ford Motor Co.'s Volvo unit in partnership with an unspecified state-owned investment company.

Ford is still evaluating possible buyers for Volvo, Chief Executive Officer Alan Mulally told reporters on Wednesday in New Delhi at an event marking the introduction of a new car.

Boosted by the investment, shares of the Hong Kong-listed arm of China's biggest privately owned carmaker Geely Holding Group Co., were up 18.99 percent Wednesday on the Hong Kong Stock Exchange, its highest since 2000.

Geely posted sales growth of 35 percent in the first eight months of the year to 185,000 units. Geely said it plans to nearly double its car-making capacity to 685,000 units a year in the next few years and produce 20 million cars in 2015, with 1.3 million overseas. A Volvo deal may help the automaker achieve that goal.