Analysts: Michelin is Generating Free Cash Flow

Michelin’s decision to pay down a 350 million euro loan borrowed at 6.7 per cent interest and maturing in 2033 is said to be an early sign that the tyre manufacturer is beginning to generate free cash flow. According to a Deutsche Bank report, despite the fact that analysts are expecting Michelin to publish first half net losses of 230 million euros, the fact that the company is buying back a loan that is more expensive than the group’s average debt (5.9 per cent) is “a strong positive signal that Michelin is currently generating free cash.”