France seeks EU approval for PSA aid, report says
PARIS (Reuters) -- The French government officially sought approval from the European Union Commission on Monday for the rescue plan for PSA/Peugeot-Citroen's financing arm, French daily Les Echos reported today.
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 was restructuring aid and decided to ask the French authorities to seek approval.
The rescue deal will have to be examined by EU competition authorities, which should give an answer within two months, Les Echos said.
"This is a normal process," a spokesman for PSA said.
"Following the vote of the French parliament on Dec. 30 on the state guarantee brought to Banque PSA Finance, a temporary authorization should be given within two months before a final authorization," he said.
The approval by Brussels could require PSA 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 added.
A state aid probe by Brussels could ultimately increase the cost to PSA of the state loan guarantee and the 11.5 billion euro refinancing deal to be finalized with creditors next month.
The rescue plan came after PSA 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.Contact Automotive News