Valeo Research Projects to Receive Financing of up to 300 Million Euros from the European Investment Bank

PARIS, FRANCE – July 23, 2009: The European Investment Bank (EIB) will grant financing of up to 300 million euros to Valeo for its current research projects aiming to reduce the fuel consumption and CO2 emissions of cars and improve active safety. The total research investment of Valeo for these projects is 645 million euros over four years and the EIB loan will come with competitive terms in two installments, the first one of 225 million euros to be drawn by the end of July.

Aligned with the objective of the European Union to establish a competitive knowledge-based economy and the policy of the EIB to finance research and innovation as a priority, this funding will cover fuel efficiency technologies such as mild and micro hybrid solutions, the development of systems for electric and hybrid vehicles and efficient transmission systems, and active safety technologies including assisted viewing systems, crash avoidance systems and advanced lighting systems.

EIB Vice-President Philippe de Fontaine Vive stressed “how crucial it is – especially now as the crisis has spread – to stimulate long-term investment in those areas that will contribute to economic recovery and benefit future generations. It is also important to support RDI (Research, Development and Innovation) projects with tailor-made financial products as under the EIB/European Commission’s Risk Sharing Finance Facility”. He added: “Valeo is a key contributor in automotive innovation, paving the way for greener cars and efficient climate change mitigation measures.”

Indeed for the EIB, this operation is provided under its European Clean Transport Facility (ECTF), which is part of its wider response to the crisis and focuses on car emissions reduction and the development of new generation vehicle technologies.

Jacques Aschenbroich, Valeo CEO, said: “This funding is very important, particularly during the current crisis, and will allow Valeo to continue and accelerate existing research projects aimed at improving fuel efficiency and active safety for vehicles, two areas where market demand is very strong and which show strong growth potential for Valeo.”

For Valeo, this loan reinforces the liquidity situation of the Group. The program of confirmed bank lines amounting to 1.2 billion euros remains undrawn. The liquidity position is further enhanced through the negotiation of a new covenant based on the net financial debt to EBITDA ratio. To date 866 million euros have been renegotiated as well as a syndicated loan of 225 million euros.