AutoNation, the country's largest auto dealership chain, said that it would return the $77 million in forgivable loans it received through the U.S. Paycheck Protection Program, which is meant to help struggling small businesses.
The Fort Lauderdale, Fla., company said that it had implemented cost-cutting measures, including temporary pay cuts for staff, reduced advertising outlays, and deferral of more than $50 million of capital spending.
AutoNation's market capitalization exceeded $3 billion as of Monday.
An AutoNation spokesperson told Reuters Friday that the company was "clearly eligible and applied on behalf of the 7,000 employees furloughed due to the covid-19 crisis."
On Thursday, however, the Small Business Administration issued new guidelines for the program, which offers forgivable loans for companies that use the funds to keep up at least 75% of payroll expenses.
While AutoNation said that it intended to use all the funds for payroll expenses, the company decided to give back the money after calling a board meeting.
Last week, AutoNation named Jim Bender president. He previously served as a vice president and chief operating officer at the company.
That move came after AutoNation said Chief Executive Cheryl Miller would take a medical leave of absence.
Former CEO Mike Jackson, who headed the company from 1999 to 2019, will take over as CEO while she recovers.
AutoNation shares at last check were 2.1% higher at $34.34. They'd jumped more than 8% in Friday's session.