Publications
Partners
Paris - Carmakers Renault and PSA Peugeot Citroen said Friday they are reimbursing ahead of schedule €1bn each in loans that were part of the French state bailout of the auto industry.
The French companies said they would each pay back €1bn ahead of the 2014 deadline to reduce interest costs.
Both companies' shares enjoyed a boost after the announcement. Peugeot jumped in morning trading and was up 2.2% at €23.11 midday. Renault was up 1.8% at €35.88.
Each company won a loan of €3bn in 2009 as part of a government rescue effort for the auto industry, and both returned to profit in the first half of 2010 after a bruising couple of years in the car sector worldwide.
Renault SA reported €780m in profits in the first half on higher car sales in all regions, while PSA Peugeot Citroen SA reported €680m in profits for the same period, beating market expectations thanks to strong demand in China and a raft of new models.
Peugeot Citroen and Renault said the reimbursements would reduce overall debt and allow a significant drop in financial charges.
