A $9.25 billion (€7B) loan guarantee from the French national government for the Banque PSA Finance arm of PSA/Peugeot-Citroen, Europe’s second largest car company, will likely gain approval from European Union regulators next week, according to sources cited by Reuters and Bloomberg.
The guarantee is aimed at ensuring the carmaker’s viability by allowing it to offer competitive financing rates to car buyers. The EU Commission is still in talks with PSA over their restructuring plan which would cut 11,200 jobs and close the Citroen plant at Aulnay, outside of Paris.
Peugeot’s automotive unit burned through 3 billion euros ($3.96B) in cash last year. Bloomberg reports that the French automaker is in discussions with banks on how to put its financial house in order, with options including selling off a stake in Banque PSA Finance or other assets to increase its capital.