PSA Peugeot Citroen: French government will restrict Dongfeng Motor's shareholding after stake acquisition deal
The French government will restrict the shareholding of Dongfeng Motor in PSA Peugeot Citroen after the Chinese auto maker’s stake acquisition in the French car maker, the Oriental Daily reported.
The Chinese language news item, citing an unnamed newswire report, said as part of the acquisition deal, Dongfeng Motor and the French government will each acquire an approximately 14% stake in PSA Peugeot Citroen.
The French government has demanded that Dongfeng Motor promise it will not raise its shareholding in PSA Peugeot Citroen in the next few years, in an attempt to cap Dongfeng Motor’s shareholding in the French car maker to prevent it from obtaining a controlling stake, the report said.
Le Figaro newspaper also reported on the developments, and noted that it is thought likely that events this week will include a capital increase in the EUR 3bn-4bn range. Without specific sourcing, the item said that the operation will include the issue of detachable warrants and should be made public Wednesday morning (20 February) after a board meeting.
The French language newspaper said that the money from the capital raise will go to three projects, according to its sources. These are accelerating the development of hybrid vehicles, bolstering market share in Latin America and in Russia, and looking into setting up a factory in Europe’s periphery. To illustrate the latter point, the item noted that rival Renault has a production base in Tangiers, Morocco.
The Figaro also noted that the car maker is expected to announce soon that it is entering exclusive talks with Santander with a view to the Spanish financial group and the French company setting up a joint venture in the automotive credit area.
Source Oriental Daily, Le Figaro