Renault has sealed a contract with banks on a 5 billion-euro ($5.47 billion) state-guaranteed loan to help the automaker to cope with the coronavirus outbreak, two sources close to the matter told Reuters.

The state-guaranteed loan should be submitted shortly to the board of directors, the sources said, before being approved formally by the French economy ministry.

A Renault spokesman was not available immediately for comment.

The automaker, which is 15 per cent owned by the French state, had been struggling with faltering demand before the pandemic. It had already flagged it would seek state aid to shore up its liquidity.

Renault posted a 19 per cent drop in first-quarter revenue to 10.13 billion euros in April. It suspended its outlook for 2020.

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

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