PARIS Jan 9 The French government officially
sought approval from the EU Commission on Monday for the rescue
plan for PSA Peugeot Citroen's financing arm, French
daily Les Echos reported on Wednesday.
EU Competition Commissioner Joaquin Almunia said last month
the Banque PSA debt rescue had initially been portrayed as
financing help for the lending operation that would not require
state aid approval from Brussels.
But he said the Commission had come to view the
7-billion-euro ($9.2 billion) state loan guarantee as
restructuring aid and decided to ask the French authorities to
The rescue deal will have to be examined by EU competition
authorities, which should give an answer within two months, Les
"This is a normal process," a spokesman for Peugeot said.
"Following the vote of the French parliament on Dec. 30 on
the state guarantee brought to Banque PSA Finance, a temporary
authorisation should be given within two months before a final
authorisation," he said.
The approval by Brussels could require Peugeot to make more
concessions including toughening its staff reduction plan, which
already includes a minimum 8,000 layoffs, the paper said.
"As for concessions, there is nothing new compared with what
was announced last year," the spokesman said.
A state aid probe by Brussels could ultimately increase the
cost to Peugeot of the state loan guarantee and the 11.5
billion-euro refinancing deal to be finalised with creditors
The rescue plan came after Peugeot suffered a downgrade by
credit rating agency Moody's in October, raising the likelihood
that financing arm Banque PSA Finance (BPF) would also be
downgraded to junk status.
($1 = 0.7654 euros)
(Reporting by Alice Cannet; Editing by Mark Potter)