Peugeot to refinance debt
PSA Peugeot Citroen, Europe’s second-biggest carmaker, said it is close to finalizing a deal with a pool of banks to refinance debt at its banking unit, providing a financial cushion as the debt crisis saps demand. Talks with lenders are “on track” and should lead to an agreement by Christmas, Carole Dupont-Pietri, head of investors relations at Peugeot said on Saturday in a telephone interview. Peugeot’s banking unit Banque PSA Finance, is seeking a 4 billion euro (US$5.3 billion) syndicated loan to refinance debt, according to two people with direct knowledge of the proposal. The self-arranged deal is being marketed to lenders and may include a five-year term loan and a three-year forward-start revolving credit, the people said, who asked not to be identified because the terms are private.
Pilots agree to new contract
United Airlines pilots have agreed to a new joint union contract, bringing the airline closer to finalizing its merger with Continental. The new four-year contract, which includes raises averaging 43 percent and bigger retirement contributions, covers those who came from United as well as pilots who flew for Continental before the carriers merged in 2010 into United Continental Holdings Inc. Pilots now only fly under the United name. As part of the deal, the airline’s roughly 10,000 pilots also will divide a US$400 million lump sum. In exchange, the contract gives United Continental the ability to launch a major expansion of the use of larger regional jets with 70 or more seats. Those jets, most ranging in size from 50 to 76 seats, are operated by regional airlines. United and other carriers have been especially eager to expand usage of the larger 76-seat planes because they can be flown profitably even at higher fuel prices.
No currency bonds planned
The country may finance itself with local-currency debt next year and issue no foreign-currency bonds for a second year, Economy Minister Gyorgy Matolcsy said in a radio interview. The country, which last issued so-called Eurobonds in May last year, has the biggest debt burden in the east of the EU. Public debt will fall to 73 percent of GDP by the end of next year from a projected 77 percent at the end of this year, Matolcsy said in an interview with state-run MR1-Kossuth radio on Saturday. Hungary scrapped plans to issue foreign-currency bonds this year because the forint and the country’s bonds were among the best performers in the EU, so the government preferred to raise more funds domestically, Matolcsy said. Hungary is still looking for a “safety net” from the IMF as protection against a deterioration in the eurozone economy, Matolcsy said.
Chevron to compensate
US oil giant Chevron has agreed to pay 310 million reales (US$155 million) to Brazil for an oil spill last year that fouled beaches in Rio de Janeiro, officials said on Saturday. Government news service Agencia Brasil said 90 million reales would be used exclusively for environmental cleanup and 220 million reales would serve for measures to prevent future spills. Brazilian federal prosecutor Gisele Porto said that the fine should send a message to all oil producers that “it is better to invest in preventive measures than to pay a fine for polluting.” An official from Chevron Brazil, Rafael Jaen Williamson, said the company admitted guilt for the disaster and made the payment to show that it was prepared to make amends.