Mike Stevens | Oct 6, 2009

A NEW CHALLENGER has entered the race to buy Volvo, with the US-led Crown consortium preparing to take on the current frontrunner, Chinese carmaker Geely.

Financial Times reports that the Crown consortium is lead by Michael Dingman and Shamel Rushwin, both former Ford high-ups and - in Dingman's case - a veteran turnaround specialist.

The group is understood to have fully secured financing from American private equity organisations, with additional backing from Swedish investors being sought as a sign of its plans to keep Volvo in Sweden.

Geely, the current frontrunner for the ailing Swedish carmaker, confirmed its interest last month, offering - according to FT.com - close to US$2 billion for the company.

Crown is believed to have offered significantly less, but with a similar plan to inject a further US$3b investment after the deal is completed.

The Financial Times report said that Geely is considered the frontrunner still, because of its larger bid, but that Crown represents the most credible alternative if a deal is not made with Geely.

Ford paid US$6.45 billion for Volvo in 1999. A review of the company’s prospects and worth in January 2008 saw its value being written down to US$4.05 billion.

This revised value, along with a 37 percent slump in Volvo’s vehicle sales in April, is likely to result in a heavy discount for the eventual successful bidder.

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