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Renault, PSA to repay part of state loans

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Renault, PSA to repay part of state loans

September 10, 2010 08:01 CET

PARIS (Reuters) -- Renault and PSA/Peugeot-Citroen are repaying a third of the 6 billion euros ($7.6 billion) they received in French government loans to help them through the financial crisis.

France gave loans of 3 billion euros apiece to PSA and Renault in April last year to ensure the survival of the two groups, which account for hundreds of thousands of French jobs.

The loans were due to be paid back from next year. Both companies said they will repay 1 billion euros on Friday.

"The reimbursement will be made out of existing liquidity resources, permitting the group to reduce gross debt and to realize significant interest expense savings," PSA said.

Renault said in a separate statement the repayment would help it reduce gross debt and lower interest expenses.

Both said in June they would repay part of the loans early after scrapping schemes helped the carmakers emerge from the financial crisis.

Renault said at the time it aimed to repay at least 500 million euros this year, while PSA said it could pay back 1 billion in the second half.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100910/ANE/309109997/1317#ixzz0z8ZLbTWr

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