Volkswagen will take out a massive €20 billion bridging loan to cover diesel scandal costs.

Volkswagen will take a massive €20 billion bridging loan to cover diesel scandal costs.

It was more than two months ago when Volkswagen’s diesel scandal became public and the company is already facing some big troubles. Following an announcement that VW’s US sales are down by almost 25 percent in November, now it has emerged Europe’s biggest automaker has agreed the terms of a €20 billion bridging loan with several banks.

Reuters is citing sources close to Volkswagen that say thirteen banks have offered to lend either €1.5 billion or €2.5 billion. The Germans are said to decide how to allocate the loan in the coming days, probably next week.

Last month Volkswagen said it will cut back on versions and trim options in order to save around €1.9 billion. The company also announced the next-gen Phaeton will be delayed as a part of a bigger plan to save around €1 billion.

However, VW also announced it will try to protect jobs in the company. “Jobs are a very valuable asset,” Wolfgang Porsche, chairman of Porsche Automobil Holding SE, commented at a gathering of 20,000 workers at VW's main plant in Wolfsburg. “This asset mustn't be squandered.”

Source: Reuters

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VW to take €20B loan to pay for Dieselgate