Volkswagen will now take out 20 billion euros ($21 billion at current rates) in loans to help endure the emissions scandal. The automaker will spread the debt out of over several banks, according to insiders to Reuters, and it will possibly issue bonds as soon as spring 2016 to begin paying off the bill. The lenders could charge the company a further $160 million in fees, too.

VW applied for these loans weeks ago as a cushion for upcoming expenses, but the company's situation has changed significantly since then. A scandal over CO2 emissions erupted in Europe, and prosecutors opened an investigation there into possible tax evasion in connection with the problem. Regulators in California also ordered a recall on the 3.0-liter V6 TDI after Audi confessed that the engine's software contained previously undocumented emissions control devices.

In addition to these loans, VW continues to search internally for money to pay for this scandal. Its cost-cutting plan includes reducing the research and development budget by the equivalent of $1.1 billion in 2016, and the company might also close the Phaeton's lavish factory in Dresden, Germany. However, the automaker wants to keep jobs safe from the slashed spending, according to Reuters. Every cent could be vital for the future because a Credit Suisse estimate suggests the price tag of this whole affair could be as much as $82.5 billion.

Volkswagen Information


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