Thursday, July 23, 2009
Car suppliers press EU over €3.2bn loan
Vehicle suppliers are pressing the European Union to back a €3 billion loan facility to prevent bankruptcies predicted after the continent's car manufacturing plants resume work in the autumn.
The industry is pressing Brussels to respond by Friday (July 24) to its request for a pan-European scheme that would guarantee suppliers' receiveables and speed up their payments for parts from carmakers, injecting liquidity into the sector.
Suppliers are pressing the EU for support in the hope of securing aid from the European Investment Bank or another European lending institution.
The industry is also talking to banks including Citigroup, which helped establish a similar US taxpayer-funded $5 billion facility approved by the Treasury in March, about setting up the scheme.
Suppliers face a drought in payments from September due to the long summer shutdowns planned by most motor manufacturers and the typical 90-day payment lag.
Clepa, the European auto suppliers' lobby group, estimates that more than 1,000 of Europe's approximate 5,000 auto supply companies are in immediate danger of bankruptcy, and that thousands more are distressed.
DATED: 23.07.09
FEED: AW
