(Recasts with Dongfeng statement)
SHANGHAI Feb 10 China's Dongfeng Motor Group Co
Ltd confirmed on Monday it had held talks with PSA
Peugeot Citroen about a potential investment in the
French carmaker, but said no agreement had yet been reached
between the two groups.
Earlier Dongfeng had asked for a halt on trading in its
shares pending an announcement concerning unspecified "inside
information", but gave no further detail.
The share trading halt came after sources in France told
Reuters on Friday that Peugeot negotiators and French government
officials would be in China this week, for what they hoped will
be a final round of negotiations on the tie-up with the China's
The sources said the proposed deal would involve the Chinese
carmaker and French government taking matching stakes in the
Paris-based company through a 3 billion euro ($4.1 billion)
The final push for an agreement, due to be presented to the
Peugeot board on Feb. 18, follows public discord among members
of the founding Peugeot family and protests from minority
shareholders over the planned share issue.
It was not immediately clear whether the final agreement, if
reached, would be between Peugeot and Dongfeng or its unlisted,
state-owned parent, Dongfeng Motor Corp.
Crippled by Europe's six-year market slump, Peugeot has said
it needs fresh funding to survive in the medium term. The
company's financing arm is already being kept afloat by a 7
billion euro loan guarantee from the French state.
Zhang Yuguang, a China-based spokesman for Peugeot, said he
was not aware of a trip to China by company negotiators.
($1 = 0.7343 euros)
(Reporting by Kazunori Takada and Samuel Shen; Editing by Miral
Fahmy and David Holmes)