Banco Santander (Brasil) (NYSE:BSBR) helping PSA from going down under?
Banco Santander (Brasil) (NYSE:BSBR) and PSA/Peugeot-Citroen are currently in initial-stage talks. Via these talks the Spanish bank would buy part of PSA’s financing arm. Alternatively the latter may be merged with the assets of the bank. If this deal gets finalized, BSBR would eventually assume a large portion of the refinancing needs of Banque PSA Finance. The Wall Street Journal reported that this would mark the end of the unit’s reliance on $9.2B (7B Euros) of French State guarantees.
Investigations in progress
EU’s antitrust regulators are currently investigating whether all the guarantees are in compliance with the State Aid rules as this will ensure the long-term viability of the agreement. The newspaper said that under one particular possibility BSBR could own 50% of Banque PSA and added that deals with other banks were aimed at reinforcing the French company’s access to more refinancing options in some other countries.
Auto market hit
Last year, the PSA had been compelled to negotiate on a government-backed rescue of its financing arm after its borrowing costs were hit by a string of credit downgrades. PSA is just one of the carmakers who have been hit very badly by the auto sales collapse in declining European markets. In answer to the crises, it axed 10,000 jobs, prepared to shut down one of its domestic plants and also sold 2B Euros worth of assets. No comments were forthcoming either from Santander or PSA.
Banco Santander (Brasil) (NYSE:BSBR) is a bank based in Brazil. It operates as a multiple-service bank. It offers a variety of corporate and individual banking services, such as credit operations, savings accounts, investment services, automobile lending, leasing, financing, mortgage and portfolio management, life and property insurance policies, pension plans, debit and credit cards, insurance brokerage operations and asset management among others.