Volkswagen was forced to take a $21B loan and if the automaker can’t pay it back, it may have to begin selling off assets.
According to insiders at the company, the power engineering division of the MAN truck brand would be sold first, with VW’s high-end luxury brands being the next to go. These include British marque Bentley and two high-end Italian brands, Lamborghini and Ducati.
The VW Group took the loan as a precaution in case it didn’t have enough cash in hand to cover the cost of recall service to millions of vehicles that were fit with defeat devices, a type of software that is meant to cheat on emissions tests. VW will also be faced with lawsuits, fines and penalties, all of which will cost the brand money.
Volkswagen will reportedly issue bonds and begin paying back the debt in the Spring.
Besides having to take a loan, Volkswagen is also initiating a cost-cutting plan for its vehicles which will see the number of models and trim levels offered begin to shrink. This will help the company save over $1B.
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