VW seeks as much as 215 billion in bridge financing, report says

LONDON -- Volkswagen A G is operating with banks to to build as much as 20 billion euros ($21.5 billion) in short term bridge funding to prove that the auto-maker H-AS sufficient liquidity to climate the diesel emissions disaster, two individuals familiar with the issue said.
Volkswagen doesn't require the cash now and is seeking additional funds to generate a fiscal cushion, stated the individuals, who requested to not be identified discussing personal discussions.
Volkswagen plans to get the financing set up prior to the close of the entire year, the people said.
The auto-maker will start meeting with about twelve future banks on Monday at its headquarters in Wolfsburg, Germany, to proceed within the projected financing, the folks said.
"We've consistently considered that a properly-diversified portfolio of capital programs gives us the needed flexibility to provide suitable and competitive lending alternatives for our clients together with our industrial expense requirements," Volkswagen stated in a statement to Bloomberg, declining to give additional details. "It's absolutely ordinary that the people are in a constructive on-going dialog."
The scandal has spread since Volkswagen first disclosed in September to cheating on diesel pollution evaluations. The carmaker has to recall as many as 1 1 million diesel automobiles world-wide and declared earlier this month that another 800,000 automobiles had unexplained inconsistencies in co2 output.
By 2017, the cost of Volkswagen's emissions woes will likely reach about 25-billion euros, Barclays Plc believed on Friday.
Shield standing
"It makes ideal sense" to shore-up funding, stated Sascha Gommel, a Frankfurt-based analyst for Commerzbank A G. "In purchase to secure their standing, they must demonstrate that liquidity won't ever become a problem for them, because afterward you've got a vicious circle. In the event the ratings services believe you will not have money and they down grade you, then your capital gets more expensive."
Volkswagen's automotive department had 27.8 billion euros in net liquidity at the close of the 3rd quarter, with the car-maker categorizing about 10 billion euros of that as a buffer to to aid credit.
Fitch Ratings downgraded the business's debt by two degrees on Nov. 9, joining Standard & Poor's and Moody's Investors Service.
Ensuring bridge financing would demonstrate Volkswagen is "going in the discovery stage to coping with the issue," stated Arndt Ellinghorst, a London-based analyst for Evercore ISI.
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THE VW DIESEL DISASTER
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12.11.2015
ID:3244

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