NEW ORLEANS (AP) — A top official of V-Vehicle Co., which is planning to build a fuel-efficient vehicle in northeastern Louisiana, said Sunday that he is confident that the federal Energy Department will approve a $320 million loan — a key portion of the company's financing — by the end of March.
But in the meantime, the company will reimburse the state $6.2 million in economic incentives it has received — keeping with a Monday deadline in its pact with Louisiana for getting the federal loan, said V-Vehicle CEO Frank Varasano.
"Our company is optimistic our loan will be approved soon," Varasano said in a media teleconference.
The state has committed $67 million for V-Vehicle, which plans to eventually employ 1,400 in manufacturing the company's new automobile. Details of the car are under wraps, but investors have said it will cost around $10,000 and get about 40 miles to the gallon.
Varasano and Stephen Moret, head of Louisiana's economic development agency, both said intense negotiations were ongoing with the Energy Department about the loan's terms. Both said that led them to believe the government was leaning toward approving the loan.
The Monday deadline in question required V-Vehicle to have $350 million in capital in place by that date. V-Vehicle said it has raised $86.5 million in private investment — and with the loan, will have more than enough money to complete its plant in Monroe and begin producing its car.
Varasano said the car could be on the dealer showroom floors by the end of 2011.
Moret said that until a decision is reached, no additional state money will go to the company. Varasano said the company had agreed to return the $6.2 million by April 1.
About 100 applications have been received by the Energy Department for a loan program encouraging the development of fuel-efficient vehicles, Moret said. Of those, only five have been granted — and those came from the first round of applications, he said. V-Vehicle is among companies that applied in the second round, he said.
"This is not an atypical timeline for approval," Moret said.
Asked what the company's next step might be if the Energy Department rejects the loan, Varasano did not want to speculate. "We really have no reason to believe that will happen," he said.
Varasano also said the company's demonstration vehicle was being tested and he believed it was close to the product that will eventually be sold. He said that revealing more details at this stage would compromise the company.
"This is the most competitive industry in the world," he said.
Voters in Ouachita Parish also have approved a property tax increase to fund $12.5 million of a $15 million local incentive for V-Vehicle. The company is renovating the idle Guide Corp. plant, which employed hundreds producing vehicle headlights before the company went out of business in 2006.