FRANCE: PSA must "go further" says Finance Minister as Faurecia rumours swirl
PSA Peugeot Citroen will "undoubtedly" have to go further as it looks to restructure according to one of France's highest-ranking Cabinet members, as rumours circulate the automaker is mulling a disposal of a stake in supplier, Faurecia.
The vehicle manufacturer is burning a considerable amount of cash per month, with analysts, CM-CIC Securities speculating yesterday (7 January) it could look at selling part of its 57.4% participation in Faurecia, a position on which the component maker is declining to comment.
PSA equally remained silent on the issue, but its share price soared 5% yesterday, stoking it to US$8.50.
However, it is Finance Minister, Pierre Moscovici's comments which have added fuel to the fire, although he stopped short of spelling out precisely how much more the automaker would have to do following the government's provision of a US$9bn guarantee for a US$15.2bn refinancing deal with PSA's banks.
"They undoubtedly have to go further," said Moscovici speaking on French radio. "It is up to the management of PSA to clarify this situation.
"There is no doubt [of] the idea PSA is vulnerable, but PSA is strong. There is a place for this group in Europe and the world. PSA is in a severe crisis - [it] is a private company and it is not for me what the management should do."
CM-CIC securities speculated PSA could evaluate a sale of its participation in the component maker and although the automaker declined to comment on "rumours," any disposal would come hard on the heels of the recent purchase by Russian Railways of 75% of the vehicle manufacturer's logistics subsidiary, GEFCO for EUR800m.
"It is an old story since our difficulties began about a year ago," a PSA spokesman told just-auto from Paris. "We had plenty of rumours - it all come from an analyst.
"You can interpret it in various ways. The French Minister of economy, Pierre Moscovici, said maybe we would have to go further in our restructure plan, so we don't make any comment on that."
The CM-CIC note says any disposal would 'liberate' Faurecia to have "real latitude to play a role given its size, in the in the next consolidation of the sector, which according to us, could become a reality in 2013."