PARIS – Renault Group has drawn down part of a 5 billion euro ($5.85 billion) loan guaranteed by the French government, put in place earlier this year to shore up its finances during the coronavirus crisis, Chairman Jean-Dominique Senard said.
Senard did not detail how much of the loan Renault had tapped, but added that the group had ample liquidity and that it had drawn down on the facility only to make the most of the tools at its disposal.
The automaker’s credit facility is loaned by commercial banks but carries a guarantee from the French government of up to 90 percent of the amount borrowed.
“There will not be a single euro of public money used for Renault, I’m stating this clearly, unless the world collapses,” Senard said at an event on Thursday at which the automaker unveiled a new design for an electric vehicle.
Renault joined several other major French companies including Air France-KLM in obtaining state-backed loans, as part of a crisis program set in motion in France to help firms cope with the virus crisis.
CFO Clotilde Delbos added that the loan was due to mature at year-end, and that it would have been “a bit of a shame” not to make use of it.
“We have a very good level of liquidity, there is no liquidity problem, it’s just good financial management,” Delbos said.
Delbos said in April that Renault was burning through 600 million euros a month linked to the closure of its plants and dealerships during the health crisis.
Renault lost a record 7.29 billion euros in the first half. It has embarked on a 2 billion euro cost-cutting plan and is trying to repair relations with its Japanese alliance partner Nissan. Delbos has refrained from giving any financial guidance for the year except to say that the company is on track on cost savings.