Report of US$4b capital hike dents PSA shares
Print Edition
Shares in PSA Peugeot Citroen fell 10 percent yesterday on a Reuters report it was preparing a 3-billion-euro (US$4 billion) capital increase in which Chinese partner Dongfeng and the French state would secure stakes in it.
A draft agreement, which PSA hopes to conclude this year, would envisage state-owned Dongfeng Motor Co and the French government each giving 1.5 billion euros to buy matching stakes of between 20-30 percent, people with knowledge of the matter said.
PSA, among the worst casualties of a six-year European car sales slump, is seeking more cooperation with Dongfeng or another automaker as it struggles to cut costs and losses that have threatened its survival.
Responding to the report, PSA issued a statement reaffirming it was examining new industrial and commercial projects with different partners, together with the financing that would accompany them.
Analysts noted the capital hike would cut the value of existing shares in PSA.
The funds would amount to 68 percent of PSA’s 4.39-billion-euro market value.
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