Renault and PSA To Repay State Loans Early
"Having for its part straightened out its cash flow, PSA is proposing to repay the state loan in advance for an amount of 1 billion euros ($1.3 billion)," Varin was quoted as saying by Reuters.
Last week French automaker Renault also announced it would repay the EUR3 billion state loan that it received from the French government last year “well before” the maturity date of 2014. During the annual shareholder meeting, Chief Executive Officer Carlos Ghosn said the early repayment would allow the company to refinance itself at more attractive terms on the market.
Ghosn also said that the company will be able to show an annual net profit by 2011 "at the latest." In 2009, Renault posted a loss of EUR3 billion. Renault’s CEO said the company will resume a dividend payout after skipping it for two straight years when Renault can show positive free cash flow and will have reduced its debt level to EUR3 billion from EUR5.9 billion at present.
"You can be assured that we won't wait until 2014 to repay the loan. We can do it today. We couldn't do it one year ago," Ghosn said.
Last year, the French government loaned Renault and its local rival PSA Peugeot-Citroen EUR3 billion each at an interest rate of 6% over five years to ease their cash flow problems at the height of crisis that struck the automobile industry in 2009. Ghosn said Renault will be coordinating the repayment plan with Peugeot-Citroen and the French government, adding that the repayment will be "progressive."