Berlin: Carmaker Daimler AG announced yesterday that it has secured a five-year, 7 billion euro (Dh36.06 billion) credit line that is intended purely as a liquidity reserve.

Daimler said it signed the agreement with a consortium of more than 30 international banks last Friday and it was significantly oversubscribed.

"With this credit line, we have secured today's favourable conditions for the next five years and have gained a solid liquidity buffer for the long term," Chief Financial Officer Bodo Uebber said.

Daimler said it doesn't intend to use the credit line, which will serve only as a liquidity reserve. It said it will now terminate early its two existing syndicated credit lines of 5 billion euros and $3 billion euros.

Full-year forecast

Daimler signed the deal for the credit line a day after it reported strong third-quarter earnings and lifted its full-year forecast.

Net profit for the July-September period rose to 1.61 billion euros from 56 million euros a year earlier as strong sales in China and the US pushed revenue up 30 per cent.

Daimler is now forecasting earnings before interest and taxes from its ongoing business of more than 7 billion euros this year, up from a previous target of 6 billion euros.

The company said last week that it had free cash flow from the industrial business of 5.33 billion euros, up from 2.25 billion euros a year earlier. Uebber said then that high net liquidity "is from the risk management point of view the right thing to have currently."

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