Wednesday, June 24, 2009
PSA issues cash-raising bonds
PSA Peugeot Citroen is to sell up to 575m euros of convertible bonds as it forecast an operating loss of up to 2 billion euros in 2009.
The group, which recorded a 343 million euros net loss in 2008, said the capital raised from the bond issue would go towards 'general financing needs', development projects, and the extension of the maturity of its existing debt.
In a statement Peugeot said it had no significant repayment dates until 2011, when a 2001 bond of around 1.6bn euros would fall due.
Peugeot, which is seen as one of Europe's most vulnerable automobile manufacturers, also forecast an operating loss of between 1bn euros and 2bn euros this year, citing uncertainties over whether government support will be continued in 2010, and the chance that the company would have to support its suppliers in the continuing market downturn.
The carmaker had previously declined to give guidance for its expected loss this year, saying only that it expected to remain in the red until 2010.
Peugeot received a 3bn euros long term loan from the French government in March, and a ?400m four year loan from the European Investment Bank in April.
On a more upbeat note, the group said it had revised upwards its estimate for a fall in European sales in 2009, now expecting a decline of around 12% compared to a previous forecast of 20%. Peugeot said the new estimate was thanks to the positive impact of scrappage schemes in Germany and other European countries.
DATED: 24.06.09
FEED: AW
