PSA board to meet Sunday to discuss capital hike

Article by Anita Panait, on January 19, 2014

PSA/Peugeot-Citroen's board is set to meet on Sunday, January 19, 2014, to talk about a EUR1-billion ($1.4 billion) investment from Dongfeng Motor Corp. and the French state, insiders told Bloomberg. Dongfeng and the French government are believed to be willing to each invest at least EUR500 million in exchange for 10 percent of PSA stock.

PSA would later sell shares to bring the overall funds to EUR3 billion, the people said, adding that decision on the size of the rights issue is still under consideration. The Sunday meeting may not lead a definitive agreement, they also said. The controlling Peugeot family is still divided over whether to accept the agreement, the people said. The agreement would see the 25.5 percent holdings of the Peugeot family diluted to around 15 percent following a capital increase, one of the people told Bloomberg.

An agreement with Chinese carmaker Dongfeng would mark a defining moment in PSA’s history, whose fate has been tied with the Peugeot family since its founding in 1896 by Armand Peugeot. It would also mark a shift in strategic emphasis after an alliance with General Motors failed to result to expected cost reductions.

PSA acknowledged in December plans for a possible capital hike to boost its financing as it suffers from financial losses. The French carmaker said last month that slumping auto markets and unfavorable exchange rates in Russia and Latin America will cause it to take a EUR1.1-billion non-cash charge for 2013. PSA posted a first-half operating loss of EUR510 million in its automotive unit.

Topics: psa

If you liked the article, share on:

Comments

Recommended

The Europe-bound WRC hatch developed by Toyota and Gazoo Racing team will be limited to just 400 examples as reported by AutoCar this week. Otherwise known as Gazoo Racing Masters...
by - July 21, 2017
Even cops get excited when they’re assigned to drive the best cars in the market. In Austria, police officers drive around in a Porsche 911 Carrera while in Milan, authorities...
by - July 21, 2017
Subaru has already announced that the all new Impreza will be out by fall this year. The 2018 model year not only gets a number of new upgrades, but it...
by - July 21, 2017
Do you ever wonder what challenges automakers have in selling limited edition cars? It’s different for each company but it can get stressful if the demand is high instead of...
by - July 21, 2017
Alpine is said to be developing an SUV which is believed to be the Porsche Macan’s closest rival. According to AutoExpress, the newly revived performance brand has been looking to...
by - July 20, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries