Despite the French government saying that it will not let its carmakers fail from a financial standpoint, PSA is currently not interested in a government loan, as it could complicate its pending merger with FCA.
The state is however currently supporting PSA employees on furlough or partial unemployment plans (which in France are government-funded), but that’s as much help as the carmaker currently needs, reports Autonews Europe.
“We want the company to be as free as possible of public dependence,” said PSA financial chief, Philippe de Rovira, while adding that his company has yet to ask for any type of government guaranteed loan.
Related: FCA And PSA Looking To Boost Cash Before Merger
Also, PSA hasn’t decided whether or not to pay a 1.1 billion euro ($1.2 billion) ordinary dividend on 2019 earnings, even though other carmakers such as Renault and Ford have already said they won’t pay dividends given how much cash they’ve had to burn through as dealerships and factories idled – an example PSA might want to follow.
The French government, which holds around 12 percent of PSA Group shares (as well as 15 percent of Renault), wants companies in need of state aid to scrap or at least moderate their dividend payments.
During the 2008 financial crisis, both PSA as well as Renault accepted French government backed loans of 3 billion euros ($3.2 billion) each.
Merger at risk?
As far as PSA is concerned, it is such changes to its planned payouts that could complicate its merger plans with Fiat Chrysler. The latter is to pay a similar 1.1 billion euro ($1.2 billion) dividend on 2019 earnings, as well as a one-time 5.5 billion euro ($6 billion) dividend to its investors.
The French carmaker has yet to comment on the progress of the merger currently, while its next shareholder meeting has been postponed to the end of June.
