Dow Jones Newswires (Paris) - The country's Finance Minister Christine Lagarde Tuesday welcomed the early repayment made by French car makers PSA Peugeot-Citroen (UG.FR) and Renault SA (RNO.FR) of the remainder of the EUR3 billion emergency loans they each received in 2009 to ease a liquidity squeeze when sales in the automobile market plummeted.
Both companies, eager to shake off the high-interest loans, repaid the remaining EUR1 billion tranche of their five-year loans on Tuesday after repaying the same amounts on Feb. 25 and Sept. 10, 2010. Renault Trucks, a truck-building unit of Sweden's AB Volvo (VOLV-B.SK) with industrial operations in France, received a EUR250 million loan at the same time as the two French companies, and repaid it in November.
The state set a 6% annual interest rate on the loans, but the terms of the financing provided for the rate to be scaled according to financial performance. In recent months Peugeot-Citroen and Renault were paying interest at an annual rate of 7.8%, well over the market rate, after both companies swung back to profitability on a rebound in auto sales.
Lagarde's office said the three companies had paid a total of EUR715 million in interest over a 21-month period.
