Renault is in talks with the French government to secure a state-backed loan worth several billion euros by mid-May to shore up its liquidity during the coronavirus pandemic, the French carmaker said on Thursday.

Interim Chief Executive Clotilde Delbos said Renault, which is 15 percent owned by the French state, was lining up credit lines and aid when possible, including in France and emerging markets.

“It is our duty to be on the safe side and to cover even black, black, black scenarios,” Delbos said on a call with analysts, adding that it was unclear how long the crisis would last and what impact it would have on earnings this year.

She said, however, that Renault had enough liquidity to make it through the coronavirus turmoil, including covering a monthly cash burn of 600 million euros ($647 million) linked to the closure of its plants and dealerships during the health crisis.

The company had 10.3 billion euros of liquidity reserves at the end of March – including an unused 3.5 billion euro credit line – though that was still 5.5 billion euros lower than the end of 2019. The first quarter is traditionally a period when carmakers use cash to boost vehicle stocks.

Renault shares were up 1.9 percent at 0903 GMT.

Sales of Renault vehicles have been hit hard by the pandemic as governments enforce lockdowns around the world. Rivals have reported slumps in sales and some, such as Ford Motor Co. have also been beefing up their cash reserves.

But the French carmaker was already struggling with faltering demand before the crisis, attracting scrutiny over its cash levels and financial position after posting its first loss in a decade in 2019.

“Liquidity remains high in light of cost reduction but leverage concerns unresolved,” analysts at Jefferies said.

Renault’s Japanese alliance partner Nissan posted its first quarterly loss in nearly a decade in February and the two are due to present plans to reboot their partnership in May, including industrial projects.

Delbos said in February that Renault was embarking on a “no taboo” plan to cut 2 billion euros of costs which could include job reductions as it reviewed performance at factories.

She said on Thursday there were no strings attached to the state-backed loan that would have implications for the plans, bar cancelling dividend payouts, which it has already done.

Few major French companies have yet tapped this form of state aid, barring consumer electronics retailer Fnac Darty. Air France KLM is also moving towards a government-backed rescue deal.

Renault, which has suspended its outlook for 2020, posted a 19.2 percent drop in first-quarter revenue to 10.13 billion euros. It said it would look to resume production in Europe where possible and was cutting costs in areas such as advertising.

Renault sold more cars in Russia than in its home market in the first quarter as demand slumped in Europe, the first time France has fallen from the top spot.

The carmaker benefited slightly from selling more expensive SUV-style models such as the Renault Captur but this was not sufficient to offset tumbling sales volumes. (REUTERS)