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Dec 9, 2008
VW asks for state guarantees
FRANKFURT - VOLKSWAGEN said on Tuesday it had asked for loan guarantees for its financial services unit within the framework of government aid for the banking sector, the first German automaker to ask for such help.

'We have filed two requests,' one for the financial services division itself and another for the Volkswagen bank that is a sub-unit of the division, a VW spokesman told AFP.

He declined to give the amount requested and the date the request was made.

'It is a question of obtaining public guarantees; it is not a request for recapitalisation,' the spokesman said.

VW had said several weeks ago that is was considering such a move after running into problems with refinancing for its auto credit operations.

The German government's bank support plan provides a total of 480 billion euros (S$927 billion) in aid, with the vast majority representing guarantees for interbank loans.

Berlin is also ready to inject cash into troubled German banks in exchange for stakes in them, but relatively few banks, most of them publicly owned, have applied for the cash.

The financial services units of German automakers are often involved in leasing operations that can represent a significant component of overall sales. -- AFP

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