A private equity fund managed by Goldman Sachs has plans to invest as much as $250 million in Geely Automobile, as per a media report.

Hong Kong-listed Geely Automobile is the arm of Chinese auto-manufacturer Geely Holding Group.

The deal could free up capital for Geely Automobile's parent company to make a bid for Ford Motor's Volvo unit.

Geely Automobile confirmed earlier that its parent company was bidding for Volvo.

Neither Goldman Sachs nor Geely officials could be contacted for comments.