Volkswagen has told banks supplying it with a one-year EUR20bn bridging loan that it could sell assets if other repayment means falter, according to a Reuters report citing people ‘familiar with the matter’.
One impact of the diesel emissions scandal has been to damage confidence in the company and wipe billions off its share price. Another has been that it has become more expensive for the company to borrow and the ‘bridging loan’ is intended to tide the company over until VW’s debt market (bonds) normalises.
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Some analysts have said that the costs to the company arising from the emissions scandal could ultimately go over EUR30bn and that it will be forced to divest some business units from its large portfolio, which reflects Ferdinand Piech’s decades-long strategy to aggressively expand the company into every segment of the global automotive market.
The latest car market sales figures from around the world also point to a broader ‘trust deficit’ for the VW brand in the wake of the negative publicity it has received since the scandal broke in late September. VW Group sales were down 15% in the US in November.
