LONDON Oct 18 Peugeot's talks on a 3 billion
euro ($4.11 billion) French-backed tie-up with Dongfeng are
progressing more slowly than the troubled carmaker had hoped,
sources with knowledge of the matter said after negotiators
returned from meetings in China.
The French carmaker now hopes to sign a non-binding outline
deal with its Chinese partner in late November at the earliest,
a month later than it was expecting as recently as last week,
the sources said. A deal could then be inked early next year.
A Peugeot spokesman said the company had nothing to add to
earlier comments on the talks. It has confirmed it is seeking a
deeper tie-up with existing partner Dongfeng or another
PSA Peugeot Citroen is hoping to raise as much as 3 billion
euros in a capital increase in which the French state and
Dongfeng would each take a 20-30 percent stake, Reuters first
reported last week.
Peugeot executives, officials from France's APE, the agency
in charge of government holdings, were part of a delegation that
attended key meetings with Dongfeng in Beijing on Saturday and
Wednesday, the sources said.
The talks were not as productive as expected because
Dongfeng is not in a hurry to invest in Peugeot and is playing
hard ball on price, the sources said.
Peugeot is meanwhile pushing ahead with efforts begun in May
to sell off part of its Banque PSA car loans division, said four
people familiar with the talks.
Europe's biggest car financing player Santander is reviewing
a bid to acquire 50 percent of Banque PSA, which is worth about
3 billion euros, the sources said.
Other contenders are interested in operations in specific
countries. UniCredit and Commerzbank could
be interested in acquiring Banque PSA's business in Germany,
sources familiar with the talks and sector bankers said. Lloyds
could look at its UK business and Credit Agricole
at the French one, the sources said.
It is not yet clear whether a successful share issue to
Dongfeng and the French state would remove the need for a
spin-off of the financing arm, they said.
While a capital increase could relieve pressure on BPSA's
credit rating and financing costs, a partial sale of the unit
could help win EU clearance for the planned government cash
injection into Peugeot, they added.
Santander, UniCredit, Commerzbank, Lloyds declined to
comment. Credit Agricole was unavailable for immediate comment.