PSA Group took a large loan for the development of production
In May this year, the PSA group took out a significant loan to modernize production lines. And now, the press finally managed to find out the details of this financial event. Despite the height of the coronavirus pandemic, the company's management was not afraid to get into a debt loop in the name of a bright future for the concern.
Another syndicated loan from the European Bank amounted to a record three billion euros. This amount was added to the company's existing credit line, which at that time amounted to another 6 billion euros. At the same time, the loan will have to be paid off in a year, although the agreement provides for two deferrals of three months each.
I must say that this practice is a normal occurrence among the world's major car manufacturers in a difficult economic situation. For PSA, things worsened in the past 2019, when sales of new models in the Chinese market fell by as much as 55%. This forced the management of the concern to mercilessly close part of the local production.
However, this move did not help improve the company's shaky financial position. At the initial stage of the new 2020, the operating margin decreased to 8.5 percent, which is why it was decided to attract credit funds.
Another syndicated loan from the European Bank amounted to a record three billion euros. This amount was added to the company's existing credit line, which at that time amounted to another 6 billion euros. At the same time, the loan will have to be paid off in a year, although the agreement provides for two deferrals of three months each.I must say that this practice is a normal occurrence among the world's major car manufacturers in a difficult economic situation. For PSA, things worsened in the past 2019, when sales of new models in the Chinese market fell by as much as 55%. This forced the management of the concern to mercilessly close part of the local production.
However, this move did not help improve the company's shaky financial position. At the initial stage of the new 2020, the operating margin decreased to 8.5 percent, which is why it was decided to attract credit funds.
