The write-down of PSA Peugeot Citroen’s assets means that its net losses for 2012 could be as much as €6bn – an absolute car crash, you might say. Bosses are saying that it will not have any effect on its plans for reviving its fortunes, but European car sales have collapsed in recent years, so we’re not entirely sure a financial turnaround will be as easy as 1-2-3.
Nonetheless, shareholders reacted positively to the news, with the price of shares climbing about 1%. Shareholders must be relieved that the company is finally admitting to the host of problems that it has: it has been whispered that the firm is in the doldrums for years, but now it has essentially been admitted formally.
But admitting it doesn’t make the situating that much better: PSA is currently trying to get Brussels to approve a €7bn bailout of its financing arm by the French government, and it is getting through €200m of cash per month. Surely there’s a limit to those lenders’ patience…
Still, there are now rumours that the French government may be considering buying a stake in the company to keep it afloat. Budget minister Jerome Cahuzac said: ‘To be clear, this company cannot and must not disappear. Therefore we will do whatever is need for this company.’