Geely Auto says no financing plans for parent's Volvo buy

Geely Automobile Holdings Ltd<0175>, the Hong Kong-listed unit of Zhejiang Geely Holding Group, said it has no plans to raise funds for its parent's purchase of Swedish luxury car maker Volvo from Ford Motor Co, according to CEO Gui Shengyue, Reuters reported.

The statement was made in response to rumors saying that the auto maker plans to raise money to fund the Volvo purchase, according to the report.

Zhejiang Geely earlier said that it had obtained total financing of US$2.7 billion for the purchase and development of Volvo unit.

The parent company has set up a company with a registered capital of RMB 8 billion to partly fund the purchase, said Gui.

RMB 4 billion will come from the parent company itself. Additional funding will come from partners and from Hong Kong, European and U.S. banks, he said.

Geely's net profit grew 35% year on year to RMB 1.18 billion last year. Revenue was RMB 14.07 billion in 2009, up from RMB 4.29 billion in 2008.

In the first quarter of the year, Geely's vehicle sales jumped 68% year on year to 102,838 units.