Brussels, 11/02/2013 (Agence Europe) - On Monday 11 February 2013, the European Commission authorised a French state guarantee for bonds issued by PSA Finance (bank) worth €1.2 billion to enable the bank (wholly owned by struggling PSA car company) to refinance itself on the markets. Because the aid will be of benefit to the entire company, autorisation is conditional a restructuring plan for PSA as a whole being brought forward, within the six-month period, to ensure its long-term viability. It is upon this basis that the Commission will make a permanent decision about the aid.
The Commission says the guarantee will cover new PSA Finance bond emissions and other bonds issues by the bank for six months from the date of the decision, which will amount to loans to Banque PSA Finance with a maturity of three years from the emission date. PSA Finance is exclusively involved in financing the car company's business (sales of Peugeot and Citroën vehicles, vehicle stocks and spare parts for the two makes' distribution networks), but is having problems raising finance due to the weak performance of the car company. The bank's ability to raise cash is crucial for the car company's manufacturing arm. (FG/transl.fl)