Hong Kong-listed Geely has announced that it will raise 334 million US dollars by issuing convertible bonds and warrants to an affiliate of Goldman Sachs. That means Goldman Sachs will hold over 15 percent stake in the Chinese car maker, becoming its second largest shareholder. Earlier, Geely said money raised from the bond sale could be used for potential acquisitions. Some analysts think the investment could be related to Geely's bid for Volvo. But its chairman says the money will be only used to buy plants from its parent.

Li Shufu, Chairman of Geely Automobile Holdings said "Some of Geely's investment for production on the Chinese mainland will moved into our Hong Kong-listed company. We are issuing bonds because we want to buy car-making plants from our privately held parent. As for overseas acquisitions, we have already finished most of that, including buying auto parts makers. The bond issuance is not related to anything else."

And that could be true, because analysts believe the Volvo unit is worth at least two billion US dollars. So the money Geely has raised this time is far from enough to buy it out. And that it's more likely that the money will used for expanding production.

Jia Xinguang, Auto Analyst said "The money raised is limited, it's not enough for bidding Volvo at all. I think it's just for short-term financing."

Analysts also point to improving performance in Ford Motor and that it's not in such desperate need for money. And that Geely may have missed the best chance for a bargain buy.