Embattled German automaker, Volkswagen has concluded plans on an agreement that will see it borrow €20 billion ($21 billion) bridge loan from banks to help it resolve the issues surrounding the much-publicised emissions scandal.
The information was obtained by Reuters from “three people familiar with the matter” on Wednesday.
A bridge loan is a type of short-term loan, typically taken out for a period of 2 weeks to 3 years pending the arrangement of larger or longer-term financing.
The loan is expected to be spent on regulatory fines, lawsuits and refits for the over 11 million diesel vehicles affected by the emissions scandal.
According to Reuters quoting two of its sources, thirteen banks are offering credit portions of either 1.5 billion euros or 2.5 billion euros each, or a total of 29 billion euros.
A Volkswagen spokesperson contacted by Reuters declined to comment on the issue.
Also, one of the people said credit portions would be assigned to banks in the coming days, without being specific, while the other said the banks would get the credit portions by Friday.
The company said it had set aside 6.7 billion euros for the initial costs of the diesel emissions scandal and expects to incur additional expenses of at least 2 billion euros for falsifying certification of carbon dioxide emissions.
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