French finance minister to make corporate debt restructuring proposals

French Finance Minister Bruno Le Maire said on Wednesday he would make proposals to restructure the debts of companies struggling with loans taken on during the coronavirus crisis.

French Finance Minister Bruno Le Maire said on Wednesday he would make proposals to restructure the debts of companies struggling with loans taken on during the coronavirus crisis. Many French companies are emerging from the pandemic with severely strained balance sheets after they borrowed massively under a state-guaranteed loan programme designed to help them through the crisis.

While the programme helped depress bankruptcies last year to record low levels, economists expect a surge in filings as various state support schemes are wound down. Le Maire said he would make proposals in coming weeks that would bring together representatives of the state, bankruptcy courts and banks to find solutions for companies struggling with their debt on a case-by-case basis.

"I will do the maximum to avoid bankruptcies in our country. We're not going to wait for the company to hit the wall," Le Maire said on BFM TV. "We'll look at the situation... to see if the debt can be extended over time or if part of the debt can be cancelled," he added.

Bankruptcies remained exceptionally low through most of the first quarter until a surge in filings and liquidations in March, according to consultancy Altares, which compiles data from bankruptcy courts. While bankruptcies were down 32% in the first quarter from the same period of last year, they were 155% higher in the last two weeks of March compared with a year earlier when France entered its first lockdown and courts had to close.

In March, 8 out of 10 companies going before the bankruptcy courts went straight into liquidation, a level not seen in two decades, Altares said on Wednesday.