Brussels, 31/07/2013 (Agence Europe) - Following what it describes as an in-depth investigation, on 31 July, the European Commission authorised restructuring aid of €571.9 million granted by France to the PSA group. In particular, the updated structuring plan will help to restore the group to viability while limiting the distortions of competition caused by state aid. The aid will take the form of a state guarantee covering bond issues by the Banque PSA Finance (BPF) until 31 December 2016 up to a maximum of €7 billion for the principal (a gross subsidy-equivalent of €486 million) on the one hand, and a repayable advance of €85.9 million for the implementation of the “50CO2Cars” R&D project on the other. This brings the total amount of restructuring aid to €571.9 million.
“Following an in-depth investigation, we have arrived at a formula which allows PSA to restructure in accordance with clear limits, reducing to a minimum the damaging effects for competitors who have not received support from public funding. This is a balanced result which offers the PSA group the chance to make a new start on a sound basis”, said EU Competition Commissioner Joaquín Almunia.
In return for the authorisation, the French state has made a number of commitments that will run until 31 December 2015. The state guarantee for BPF must not allow it to offer credit for the purchase of vehicles, which would increase the PSA group's sales artificially and harm its competitors. The French authorities therefore undertake to increase the price of the guarantee paid by PSA (currently 260 basis points a year on the amounts issued) based on the penetration rate of Banque PSA Finance, that is to say the proportion of Peugeot and Citroën vehicles sold with financing from Banque PSA Finance. If the penetration rate increases substantially, the price may increase to 491 basis points, corresponding to the market price estimated by the Commission. In addition, the PSA group has promised to maintain the margin for loans granted by Banque PSA Finance to dealers and to refrain from making major acquisitions during the period covered by the restructuring plan. The €24.5 million in subsidies initially provided for 50CO2Cars will be converted into recoverable advances so that, if the technology is successful, the advances will be repaid to the state in full.
The car company will have to get authorisation from the Commission if it wants to make any acquisitions worth more than €100 million a year. An independent expert will be appointed, with the prior approval of the Commission, to ensure that these measures are complied with. The company will contribute towards the cost of the restructuring plan by setting up of a major plan for the sale of assets. (FG/transl.fl)