Renault secures $8.3 billion loan backed by French government

Renault has secured a €5 billion ($8.3 billion) loan facility backed by the French government.

The French government owns a 15 per cent stake in the automaker, and has guaranteed 90 per cent of the loan from a group of five banks.

The automaker says it will use the money to meet its liquidity requirements.

Renault was already swimming in red ink before the Coronavirus pandemic, and the related lockdowns and economic disruption. Last year the automaker recorded a €141 million ($235 million) loss.

Last week Renault unveiled draft details about its plan to slash costs by €2 billion ($3.3 billion) over the next three years by cutting some factories and firing up to 14,600 employees.

More details are expected to be released once new CEO Luca de Meo, formerly the head of Seat, takes up his new role in July. Reports indicate some models – and even the Alpine marque – may be dropped by the brand.

The Renault-Nissan-Mitsubishi Alliance also announced a new “leader-follower” development model, which will see one automaker to lead the development of all cars within a particular market segment.

Each Alliance member will also be given key research and development projects, as well as core markets on which to focus most of its energy.