Volkswagen Seeks $21.5 Billion Loan to Help Cover Dieselgate Expenses

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Volkswagen’s emissions crisis is about to get very expensive, and to make sure it has the money to pay for all the fines, class action suits, and recall costs, the German auto giant is working with banks to get financing. VW is seeking as much as 20 billion euros ($21.5 billion U.S.), reports Bloomberg. According to two people familiar with the situation, VW doesn’t need the money right now but is looking for extra cash to give it a “financial cushion.” The goal is to secure the additional funds by the end of the year. VW will begin meeting with roughly a dozen banks on Monday at its headquarters in Wolfsburg to review proposals for short-term bridge financing. Though $21.5 billion is no doubt a large sum for a loan, VW is claiming that it’s nothing out of the ordinary. “We have always considered that a well-diversified portfolio of funding tools gives us the necessary flexibility to offer appropriate and competitive financing options for our customers as well as our industrial investment needs,” VW said in a statement to Bloomberg. “It is perfectly normal that we are in a constructive ongoing dialog.” Normal or not, the automaker could definitely use the extra liquidity seeing as the emissions scandal has grown since news first broke about the defeat device software. VW will recall roughly 11 million diesel vehicles worldwide beginning next January, and acknowledged earlier this month that another 800,000 vehicles show “irregularities in CO2 levels.” The EPA has alleged that VW vehicles equipped with the 3.0-liter turbodiesel V-6 may also use cheats, though the automaker has denied that. In the U.S. alone, Volkswagen faces more than 350 lawsuits. Source: Bloomberg