Brazil is South America's largest auto producer and a major base of operations for General Motors, Fiat Chrysler Automobiles, Volkswagen Group and Ford Motor Co., which are requesting a bailout for their local units to weather the crisis stemming from the coronavirus pandemic.
An auto industry source familiar with the negotiations said the companies still hope a deal can be made before May 8, when Brazil's auto industry association will hold a regular news conference to discuss production figures.
The automakers, which also include Nissan Motor Co., Toyota Motor Corp., Honda Motor Co. and Hyundai in addition to France's Renault and Peugeot, have stated they require urgent loans to make payroll and to keep alive what they describe as a crucial supply chain that contributes a significant chunk of Brazil's GDP.
The development bank also is in talks to help airlines with 10 billion reais in aid, but discussions have stalled because of the Brazilian government's request that the loans be convertible into equity.
The auto industry source said the carmakers are seeking loans with low interest rates and long maturity dates, and with some form of local collateral.
The other source said banks do not consider auto plants in Brazil particularly appealing as collateral, saying they would be hard to sell if necessary.
(article source:automotive news)