Dongfeng stops share trading in HK pending insider info disclosure

Article by Anita Panait, on February 13, 2014

Dongfeng Motor Group stopped trading of its shares on Feb. 10, 2014, in Hong Kong pending a disclosure relating to "inside information. The halt comes after Bloomberg’s French sources said on Friday that PSA/Peugeot Citroen negotiators and French government officials are in China for what they hope will be a final round of discussions over an agreement with the Chinese carmaker.

Dongfeng has disclosed that the discussions included investing in PSA's securities and possibly collaborating in technology, research, manufacturing and distribution. In a statement, Dongfeng said that it has not entered into any agreement and will make a further announcement when necessary. Reports have said that the agreement under discussion would entail Dongfeng and the French government taking stakes in PSA via a EUR3 billion ($4.1 billion) share issue.

The agreement could increase the number of board members at PSA from current 15 members to 22, according to a source close to the discussions: three for each major shareholder, three for the staff and 10 independents including a new chairman. The tie-ups’ industrial details still remain undisclosed. PSA has remarked it is mulling a fourth Chinese site with Dongfeng as well as an exclusive deal to develop HybridAir transmission technology.

PSA is targeting to finalize the agreement with Dongfeng and France when it reports full-year earnings on Feb. 19. According to sources, discussions focused on selling 14-percent stakes to Dongfeng and France for at least EUR750 million each. The Peugeot founding family would retain 14 percent, down from the current holdings of 25.5 percent of the equity and 38.1 percent of the voting rights.

Topics: dongfeng

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