PSA Peugeot Citroen has confirmed long-held speculation it is seeking a capital increase of EUR3bn (US$4.1bn) with the possible involvement of partner, Dongfeng and potentially the French State.
“PSA confirms the pursuit of negotiations regarding a strengthening of its industrial and commercial alliance with Dongfeng Motor, as well as a possible capital increase of an amount in the order of EUR3bn,” said a statement from the French automaker.
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“Under the preferred scenario, the “company would implement a capital increase reserved to Dongf eng Motor followed by a rights offering in which Dongfeng Motor would participate.
“The French State may also participate in these two capital increases on the same terms and conditions as Dongfeng Motor.”
In addition, the manufacturer said free share warrants may also be issued to existing shareholders – prior to the capital increases in a total amount of EUR3bn referred to above – with an exercise price equal to the price of the reserved capital increase.
The automaker also said it was “analysing other alternative capital increase scenarios,” but did not reveal what these were.
Further details of the plan are slated to be announced at PSA’s annual results on 19 February, although the company stressed it was unable to give any “assurance” concerning the project.
