LONDON Jan 9 Banque PSA, the financial arm of
loss-making French car maker PSA Peugeot Citroen, will
sign around 5 billion euros ($6.52 billion) of loans as part of
an 18.5 billion euro debt rescue plan in the next few days,
bankers said on Wednesday.
The debt rescue package consists of an 11.5 billion euro
loan refinancing, which includes the 5 billion euro loan and
bilateral loans, and around 7 billion euros of state loan
Slumping sales at Peugeot, Europe's second-biggest auto
maker, have put the group's finances under strain. The company
is shedding assets, cutting 10,000 jobs and closing production
capacity to stem mounting losses.
Banque PSA is putting the 11.5 billion euro refinancing
package in place to secure funding before a possible downgrade
of its credit rating to non-investment grade or 'junk'. A
downgrade would increase the bank's funding cost.
($1 = 0.7667 euros)
(Reporting by Alasdair Reilly; editing by Keiron Henderson)