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Peugeot family divided on capital hike plan - Le Monde
January 17, 2014 / 5:36 PM / 4 years ago

Peugeot family divided on capital hike plan - Le Monde

PARIS, Jan 17 (Reuters) - PSA Peugeot Citroen’s supervisory board will meet on Sunday to mull how to raise 3 billion euros ($4.1 billion), with the family that still controls the French carmaker split over the available options, Le Monde newspaper said on Friday.

Peugeot is cutting jobs and plant capacity in an attempt to halt losses inflicted by Europe’s economic slump and an overall decline in car sales that has continued for six years.

Peugeot last month agreed to enter final talks on a capital increase that would see China’s Dongfeng Motor and the French state each take around 20 percent, leaving the Peugeot family with around 15 percent, a source told Reuters then.

Peugeot advisers Rothschild and Morgan Stanley now estimate the carmaker could raise a larger portion of the capital - between 1.5 billion and 2 billion euros - by issuing shares directly on the market, according to Le Monde.

This would see Dongfeng and France investing about 500 million and 750 million euros respectively, instead of 1 billion each, turning them and the Peugeot family into three almost equal partners with 12 to 15 percent. This plan is favoured by Robert Peugeot, who runs the family holding.

Supervisory board Chairman Thierry Peugeot opposes this option, however, and wants instead to carry out the entire capital increase directly via the market, Le Monde reported.

“The most important thing is to find a balance between the different parties involved,” the newspaper quoted a source as saying.

A Peugeot spokesman declined to comment.

“We confirmed in December that we would be negotiating an industrial and commercial project with Dongfeng and other partners. These negotiations are continuing,” he said.

A source familiar with the matter confirmed that the supervisory board would be meeting on Sunday, but did not give details of the issues to be discussed.

Shares in Peugeot closed 2.3 percent higher at 11.48 euros on Friday. ($1 = 0.7352 euros) (Reporting by Matthias Blamont and Maya Nikolaeva, editing by Mark Heinrich)

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