(Bloomberg) --
Renault SA Chairman Jean-Dominique Senard said the French carmaker is seeking as much as 5 billion euros ($5.5 billion) in government-backed loans to weather the coronavirus pandemic, while dismissing the possibility of nationalization.
“We are working on the idea of bank loans that would be guaranteed by the state and are destined to be reimbursed,” Senard said Friday on RTL radio. “This will help us get past this bad period.”
He brushed aside the possibility of the state retaking control of the troubled carmaker, saying “we aren't in this perspective.”
Renault on Thursday scrapped its dividend to conserve cash after plant and showroom closures strangled operations. Senard and interim Chief Executive Officer Clotilde Delbos are taking a 25% pay cut for at least the second quarter. The dividend, which had already been reduced earlier this year, would have been worth 325 million euros.
French Finance Minister Bruno Le Maire has vowed to provide strong support for companies including Renault and Air France-KLM, while at the same time threatening to cut or withhold financial support from corporations paying dividends. The government is the carmaker's most powerful shareholder, and, like nations worldwide, has pledged billions of euros to help businesses get through the health crisis.
Renault is working on restarting factories in Portugal, Romania and Russia, Senard said Friday. It joined global carmakers in shutting plants and dealerships as governments imposed restrictions on public life to curb the virus.
Before the outbreak began in China, Renault's profitability was already on the decline and the carmaker was struggling to repair its relationship with partner Nissan Motor Co. following the arrest of their former chairman, Carlos Ghosn, in 2018. In the interview, Senard said its partnerships with Nissan and Mitsubishi Motors Corp. are extremely important.
The French company previously said it held 15.8 billion euros in liquidity and had a 1.7 billion-euro net cash position at the end of December.
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