UPDATE 1-Safran axes dividend, adds 3-billion-euro credit line

(Adds details) PARIS, March 26 (Reuters) – French aerospace supplier and engine maker Safran withdrew its dividend and outlook and unveiled a new 3-billion-euro credit line, becoming the latest company to rein in cash due to the impact of the coronavirus crisis. The world’s third-largest aerospace supplier, which co-produces engines for narrow-body jetliners with General Electric, also said it was expanding cost reductions implemented after Boeing halted output of the grounded 737 MAX in January. “Very significant measures are implemented such as a pause in (capital spending), the definition of new objectives for R&D and the reduction of direct and indirect costs,” Safran said in a statement on Thursday. It also said it would take advantage of schemes set up by governments, particularly short-time working. Safran said in February that to reach its annual forecasts it was targeting 300 million euros of cost savings and other belt-tightening measures to cope with the 737 MAX outage and the impact of the coronavirus at that time on its Chinese plants. Earlier this month Chief Executive Philippe Petitcolin said Safran would expand those measures as the epidemic began to spread worldwide. Safran said it would issue new financial guidance for 2020 “when impacts on the business and the adjustment measures can be assessed with sufficient precision”. Scrapping the 2019 dividend of 2.38 euros per share will save Safran about 1 billion euros in cash. Safran said that its May 28 shareholder meeting – currently due to be held at a campus outside Paris – could be held behind closed doors, or else that its date and venue could be changed. (Reporting by Tim Hepher; Editing by Sandra Maler and David Gregorio)

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