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France's Renault reaches deal on 5 billion euro state-backed loan - sources

Employees, wearing protective face masks, work on the automobile assembly line of Nissan Micra cars at the Renault automobile factory in Flins as the French carmaker ramps up car production with new security and health measures during the outbreak of the coronavirus disease (COVID-19) in France, May 6, 2020. REUTERS/Gonzalo Fuentes

PARIS (Reuters) - French carmaker Renault RENA.PA has sealed a deal with banks on a 5 billion-euro (4.46 billion pounds) state-guaranteed loan to help the company to cope with the coronavirus outbreak, two sources close to the matter told Reuters on Tuesday.

The state-guaranteed loan, which Renault had been working on for about a month, should be submitted shortly to the board of directors, the sources said, before being approved formally by the economy ministry.

A Renault spokesman was not available immediately for a comment.

The firm, which posted a loss in 2019 and had been struggling with faltering demand before the pandemic, has already flagged it would seek state aid through this format, in a bit to shore up its liquidity.

Other companies such as Air France KLM AIRF.PA have also secured bailout deals through state-backed loans, which are funnelled through commercial banks.

Reporting by Gilles Guillaume; Additional reporting by Maya Nikolaeva and Gwenaelle Barzic, Writing by Matthieu Protard, Editing by Sarah White

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