The European Commission gave PSA Peugeot approval for a Eur7 billion debt rescue from the state. This will have the car manufacturer keep its company afloat after struggling with its losses. EU approved the financial aid with a condition given to Peugeot. According to the European Commission, the company must keep its debt in check. It also added that the company should pay a higher rate after improvements on its financing business is seen.
According to the statement issued by EU Competition Commissioner, Joaquin Almunia, the financial aid given and its corresponding condition was balanced and offered the company the chance to start anew on a sound basis.
PSA Peugeot reached a Eur5 billion loss last year. The car manufacturer was worst hit during the five year market slump in Europe. The company is still burning down approximately Eur100 million each month to finance the company.
In over two years, the company has cut down 11,200 jobs. Peugeot CEO, Philippe Varin will announce the results of the first half financial report of the company on Wednesday and will give updates on the firm's restructuring plans.
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