Family-controlled automobile group PSA Peugeot Citroën has announced it is to repay €1 billion of the €3 billion loan it received from the French government last year.
The early repayment will be made out of existing liquidity resources and allow the Paris-based group to reduce gross debt and to save on interest payments, according to a statement.
The full €3 billion loan, announced in February 2009, followed two years of declining sales. Revenues were down more than 10% at €48.4 billion in 2009 and more than 7% at €54.4 billion in 2008.
However, results for the first half of 2010 show that the business is getting back on track. Revenues increased over 20% to €28.4 billion compared to same period last year, while the company said it expected its automotive division to be "close to break even" in the second half of the year.
Demand is being driven by China and Latin America, where Peugeot said it expects double digit and high single digit growth respectively for the rest of the year. As a result, the company unveiled its first Asian operations head in May.
The group, in which the founding Peugeot family still retains a 30% stake, is also trying to position itself as a more environmentally friendly manufacturer given the French government's insistence that its loan was conditional on developing cleaner, more fuel efficient vehicles.
Peugeot has already signed an agreement with Mitsubishi Motors Corp to develop electric vehicles, the first of which will be on sale at the end of 2010.
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