Coronavirus crisis: Car maker PSA secures further 3 billion euros worth of loans
French car maker and Peugeot-owner PSA announced on Monday a further 3 billion euros ($3.3 billion) worth of loans to strengthen its financial position in the wake of the hit to the global automotive industry from the coronavirus crisis. The latest syndicated loans come on top of an existing 3 billion euros worth of undrawn credit lines, making available a total amount of 6 billion euros.
The new syndicated loan has an initial maturity of 12 months with two optional 3-month extensions, added the company.
"This operation reinforces our ability to face up this exceptional situation and prepare the future. It also proves the confidence of our partner banks in the financial strength and recognized resilience of Groupe PSA," said PSA Chief Financial Officer Philippe de Rovira.
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PSA shares were up 7.3% amid a broader global equity market rally, while Renault shares also rose 10.5%.
Carmakers worldwide have been badly affected by the health crisis, first as production stalled in China, where the virus originated, and now as it spreads in Europe, where some governments have ordered unprecedented lockdowns to contain it.
Last month agency Moody's placed the credit ratings of seven European auto makers including PSA and rival Renault on review for downgrade, citing the coronavirus crisis.
Last month the French government told PSA and Renault they were entitled to help such as guarantees on loans and leeway on bills as it seeks to help companies cope with the fallout from the health crisis. PSA did not say if its latest loans had attracted any state support.
PSA, which also makes the Citroen marque, has suspended output in all its European plants until March 27 and has not given a target date for restarting production.
PSA, which is in the midst of merging with Fiat Chrysler, has also postponed its annual shareholders' meeting to June 25 from May 14.
Separately, shares in Renault rose more than 8% after top executives from the Renault/Nissan alliance told the Wall Street Journal they intend to announce their programme for the next three years in mid-May and that billions of dollars in savings are planned.