Geely cars are on display at an auto show. The Chinese homegrown automaker, which is the preferred bidder for Ford Motor Co’s Volvo unit, reached agreement with Ford on intellectual property rights issues, clearing a major roadblock to the proposed sale. [Asianewsphoto]

Geely Holding Group Inc reached agreement with Ford Motor Co on intellectual property rights (IPR) issues in its bid for Volvo, clearing a major barrier to the deal.

The remaining issues for Geely to negotiate with Ford, such as long-term strategy for Volvo’s sales and production, now will be much easier to resolve, said an industry source close to Geely. Ford is the parent company of Volvo.

Representatives from Ford and Geely, the parent of Hong Kong-listed carmaker Geely Automotive, have been discussing a sale, for about $2 billion, since early this year.

The talks, being held in London, are focused on the US carmaker’s concerns about sharing its proprietary technology and plans for new products.

After resolving the IPR issue, Geely now is seeking at least $1 billion in loans from Chinese banks to finance its $1.8 billion bid, sources said.

Homegrown Geely, which means "lucky" in Chinese, is hungry for modern and innovative technologies from the Swedish brand to upgrade its car lineup and tap the auto market in China, the world’s biggest.

At least three major Chinese banks -- including Bank of China, China Construction Bank and Export-Import Bank of China -- had agreed to extend loans to Geely Holding Group, said the banking sources briefed about the plan.

"Money is not a problem for Geely," said a source. "They definitely have strong support from Chinese banks, and there are a number of private equity funds lining up to invest in Geely."

The sources asked not to be identified, as they were not authorized to speak to the media. 
                                                                                                    Source: China Daily