Dieselgate Doldrums: Volkswagen Extends €20 Billion Loan Till June 2017

Volkswagen has extended a massive bridge loan from banks as it weathers the fallout of the emissions scandal.

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German carmaker Volkswagen has extended the one-year, €20 billion (Rs. 1.455 trillion) bridge loan that it secured in December 2015 by six months to June 2017.

Volkswagen had taken out the bridge loan to maintain its financial strength as it weathered the storm caused by the emissions scandal.

"We have now decided to extend the credit line until June 2017," VW told Reuters in an email. VW claims that the credit line will protect the financial framework for the group's operations and increase its financial flexibility.

Volkswagen agreed to a record settlement of $14.7 billion (Rs. 1.008 trillion)with US authorities and owners of 475,000 polluting 2.0-litre diesel cars.

The German carmaker is due to discuss proposals for buybacks and fixes for 80,000 3.0-litre vehicles today with American regulators.

Two sources told Reuters that Volkswagen had drawn up to half of the loan by the summer, however, the carmaker said the bridging loan was currently undrawn.

Volkswagen's emission scandal was uncovered in September 2015 after tests revealed that VW vehicles were emitting high level of pollutants despite clearing emission tests.

Volkswagen later admitted that it used cheating software to help its vehicles pass emissions tests.

Post ‘dieselgate', Volkswagen has shifted its focus towards electrification and zero-emissions vehicles and it recently unveiled the ID concept electric car

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Story first published: Tuesday, November 29, 2016, 13:13 [IST]
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