PSA Peugeot Citroën, the ailing French carmaker, has had to write down the value of its automotive assets by €3.9 billion because of the parlous state of its European markets, meaning 2012 net losses could be about €6 billion.
While executives insisted that the “accounting writedown” would not have an impact on its financial recovery plan, which targets a return to positive operational free cash flow by the end of 2014, the heavy losses will worry investors.
PSA is seeking approval from Brussels for a €7 bil- lion bailout of its financing arm by the French state and analysts are eager to see evidence that it is bringing its €200 million of monthly cash burn under control.
The company said last night that the writedown, part of a Europe-wide house- cleaning of corporate balance sheets demanded by market regulators, would “not involve any cash-out, nor will it affect the group’s liquidity or its solvency”.
It reconfirmed its net debt target of €3 billion for the end of 2012.
Unlike other European companies, such as French bank Crédit Agricole and steelmaker ArcelorMittal, PSA stressed the impairment was not related to goodwill. – Copyright The Financial Times Limited 2013