With 500 million euros obtained from several banks, Fnac Darty became Sunday, April 19 the first major French group to benefit from the loan system guaranteed by the state.

Shortly after the confinement of the population in France and the compulsory closure of non-essential businesses, the government undertook to guarantee up to 300 billion euros in loans to businesses. For large companies with more than 1.5 billion euros in turnover, these loans are 70% or 80% covered.

"With more than 20 billion euros in loans granted to 150,000 companies, the deployment of the loan guaranteed by the State is today a reality for French companies, whatever their size", underlines the Minister of Economy and Finance, Bruno Le Maire, Sunday, in a press release.

The loan from Fnac Darty, 70% of which will be guaranteed by the State, "will have a maturity of one year, with the option of extension up to five additional years [April 2026]". It was subscribed with a pool of banks including Arkéa, BNP Paribas, Bred, CIC, Crédit Agricole CIB, La Banque Postale, LCL, Natixis CIB and Société Générale CIB. They therefore undertake to cover 30% of the amount, against 10% for loans guaranteed by the State to SMEs.

Other large companies are highly likely to have recourse to this device to get through the crisis, notably the Air France company for which Bruno Le Maire must present the support measures in the coming days, or the car manufacturer Renault including the president, Jean-Dominique Senard, said that he planned to borrow up to 4 or 5 billion euros.

Falling recipes

For Fnac Darty, this involves "securing the group's liquidity [and preparing for the resumption of activities", while all the physical stores in France, Spain, Switzerland and Belgium have been closed since mid - March, joined by all those from Portugal at the end of the month.

The distributor announced Sunday, five days ahead of the schedule of its quarterly results, having seen its revenue fall by 7.9% in reported data to 1.49 billion euros (and 10.3% in data comparable) between January and March.

In the past month, the group's sales have plummeted by 30%, he said, stressing nevertheless that its online sales (20% of its turnover in 2019) had doubled in the last two weeks. March and early April.

The group, which had already warned that it would not be able to meet its financial targets for 2020, also announced Sunday that it was withdrawing its proposal to pay a dividend of 1.50 euros per share under the fiscal year 2019, and that it would not proceed with share buyback programs in 2020.

The group also benefits from other assistance systems put in place by the State, including the use of short-time working for 80% of its workforce in France, a reassessment of the payment of rents and a delay in the payment of taxes and social contributions .

The overall remuneration of CEO Enrique Martinez will be "reduced by 25% during the entire period during which group employees will be in a situation of partial unemployment", like that allocated to the members of the board of directors. Fixed compensation for members of the executive committee "will be reduced by 15% during the same period".

With AFP

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