- A strengthening of the industrial
and commercial partnership with Dongfeng Motor Group
- €3.0 billion capital
increases
- Free attribution of equity warrants
to existing shareholders
- A capital increase reserved for
employees will be offered in 2014, to give them the opportunity to
participate in the recovery of the Group
Regulatory News:
PSA Peugeot Citroën (Paris:UG) announces today major
business and financial projects aimed at improving its
competitiveness and accelerating its globalisation and emerging
markets expansion strategy, while reinforcing its financial
strength. They represent a continuation of the measures undertaken
as part of the Rebound 2015 plan, the new Social Contract and the
“Back in the Race” strategic plan that the Group will present in
April 2014.
The operations would consist of:
1. The strengthening and deepening of the existing industrial
and commercial partnership with Dongfeng Motor Group (“DFG”),
China’s second largest carmaker, in order to capitalise on the
Group’s current success in the world’s largest automobile market,
which is now the primary source of growth for the automotive
industry.
2. €3.0 billion capital increases with a free attribution of
equity warrants to existing Peugeot SA shareholders, including:
- A reserved €1,048 million capital
increase to be subscribed by DFG and the French State on an equal
basis, at a subscription price of €7.5 per share ;
- A c. €1,950 million rights issue open
to all Peugeot SA shareholders (including DFG and the French
State), and underwritten by a syndicate of banks for the shares not
subscribed by DFG, the French State and FFP/ EPF ;
- Prior to the capital increases, an
attribution of free equity warrants to existing Peugeot SA
shareholders, with one warrant granted per existing share, based on
a subscription ratio of 10 warrants for 3 new PSA Peugeot Citroën
shares. The warrants could be exercised over three years and would
be exercisable from the 2nd year, with a strike price equal to the
subscription price of the reserved capital increase in favour of
DFG and the French State i.e. €7.5 per share.
3. A capital increase reserved for employees will be offered in
the course of 2014, in order to give them the opportunity to
participate in the value creation potential of the Group.
These operations, which have been agreed in principle by the
parties involved, remain subject to the signature of final
documentation, planned at the end of March 2014, and the approval
of regulatory bodies, notably in France and China, as well as the
approval of the Extraordinary General Meeting of Peugeot SA
shareholders due to take place in the second quarter of 2014.
These operations are aimed at:
- Strengthening PSA Peugeot Citroën’s
footprint in China and in ASEAN and the realisation of industrial
synergies with DFG, of around €400 million per annum for PSA
Peugeot Citroën by early 2020s ;
- Reinforcing PSA Peugeot Citroën’s
competitive positioning in Europe, in particular
through :
- Accelerating PSA Peugeot Citroën’s
development via the financing of a program of strategic investments
;
- Strengthening its balance sheet and
liquidity, resulting into a strong decrease of financial
charges
Group trade unions of the Group are aligned with these projects
and the Peugeot SA Work Council, consulted in this operation issued
on February 18 a unanimous approval.
The President of the Supervisory Board said:
"The Supervisory Board has unanimously voted in favor of these
major operations that open a new page in the history of PSA Peugeot
Citroën. By reinforcing its financial solidity whilst outlining
perspectives for an ambitious international development, these
measures will contribute to the long term future of the Group as
well as its future growth which will benefit the Group’s clients,
employees, shareholders and all its partners."
1) Accelerating the Group’s international development
by strengthening the industrial and commercial partnership with
DFG
With nearly 16 million vehicles sold in 2013 and an annual
growth of c. 18% between 2013 and 2015, China is the world’s
largest automotive market and the primary source of growth for the
automotive industry. Since 2013, it has been PSA Peugeot Citroën’s
second largest market, with around 550,000 vehicles sold in 2013
via DPCA, its 50/50 joint-venture with DFG.
DFG is a listed company on the Hong Kong stock exchange and with
a market capitalization of c. €9.5 billion, estimated revenues of
€17.3 billion and EBITDA of €1.9 billion in 20131, is:
- The country’s second largest automaker,
with 3.1 million units sold in 2012 ;
- China’s third-ranked car manufacturer,
with around 12% market share in 2012, and second-largest commercial
vehicle producer, with around 12.5% market share in 2012 ;
- A market leader in MPVs, SUVs and
mid-sized and heavy commercial vehicles.
Today, DFG and PSA Peugeot Citroën are taking their more than 20
year-old partnership to the next level by implementing a major
industrial plan, structured around three main axes:
- A joint commitment to propel DPCA into
a new phase of growth, with the objective of tripling its volumes
to 1.5 million vehicles per annum by early 2020s, thanks to a
reinforced product plan underpinned by:
- The licensing of technologies developed
by PSA Peugeot Citroën ;
- The launch of two to three new models a
year globally for the three brands (Peugeot, Citroën and DPCA’s own
brand).
- The creation of a joint R&D centre,
dedicated to the development of products and technologies for fast
growing countries, including China.
- This R&D center will complete PSA
Peugeot Citroën’s R&D footprint in Europe and Latin America
;
- This agreement will include measures
relating to the management of intellectual property, allowing PSA
Peugeot Citroën to freely pursue the development of cooperation
ventures with other carmakers.
- The creation of a new joint venture to
drive the sales of PSA Peugeot Citroën and DFG vehicles in the rest
of Asia and possibly in other emerging markets. This is aimed at
capturing the strong growth opportunities in the ASEAN economies
and leveraging the similarities between the model line-ups marketed
there and in China.
This broader and deeper partnership represents, under its
current form, synergies estimated at around €400 million per year
for PSA Peugeot Citroën by early 2020s and could later be extended
to other areas of collaboration.
The Group has also successfully launched its DS line in China in
2013 through with its partner Chang’an Automobile Group through its
JV CAPSA, co-owned 50/50. These agreements have no impact on the DS
line development plan in China, which is designed to maximise
capacity utilization at the Shenzhen plant in 2018.
Moreover the Alliance with General Motors continues in Europe
and is delivering additional growth and synergies estimated at $1.2
billion by 2018, shared equally by the two partners.
2) €3.0 billion capital increases aimed at
strengthening the Group’s balance sheet and investment capacity, in
order to maintain its technological leadership and accelerate its
growth projects outside Europe.
a. €3.0 billion capital increases
Subject to the approval by the extraordinary general meeting of
Peugeot SA shareholders to be held in Q2 2014 and to the other
conditions detailed above, DFG and the French State would each
invest €524 million in a €1,048 million reserved capital increase,
at a subscription price of €7.50 per share, and corresponding to
the issuance of around 140 million new ordinary shares. DFG and the
French State would each own c. 14% of Peugeot SA’s share capital
following the reserved capital increase.
Upon completion of this reserved issue, Peugeot SA would
undertake a c. €1,950 million capital increase with pre-emption
rights open to all existing shareholders (including DFG and the
French State), on the basis of one right for each PSA Peugeot
Citroën share.
- The terms and conditions of the rights
issue would be determined by the Chairman of the PSA Peugeot
Citroën Managing Board under an authorisation to be submitted to
Peugeot SA shareholders at the Annual General Meeting ;
- DFG and the French State would
undertake to take up their share of the rights issue, in an amount
of €276 million each and would hold a c.14% stake each in Peugeot
SA’s share capital following the reserved capital increase;
- Peugeot family holdings FFP and EPF
would also subscribe in the contemplated rights issue to reach the
same ownership level in PSA Peugeot Citroën as DFG and the French
State (i.e. c. 14% each), demonstrating their confidence in the
strategic reach of today’s announcements and the related value
creation for the Group ;
- The portion of the rights issue not
subscribed by DFG, the French State and FFP/EPF, i.e. a maximum
amount of c. €1,400 million, would be underwritten by a syndicate
of banks.
DFG’s investment through the two successive capital increases,
for a total amount of €800 million, would accompany the deepening
of this historic industrial partnership. The French State would
invest the same amount as DFG. FFP/EPF’s investment should amount
to c. €150 million to €250 million, depending on definitive
conditions and terms set in the context of the rights issue.
Subject to the approval by the extraordinary general meeting of
Peugeot SA shareholders and to the other conditions detailed above,
current Peugeot SA shareholders (i.e. not including DFG nor the
French State) would receive, ahead of the reserved capital increase
and the rights issue, one free equity warrant per share held,
enabling them to increase their exposure to the Group’s value
creation potential.
1. The exercise of 10 equity warrants would give the right to
purchase 3 new shares ;
2. Their exercise price would be €7.5, allowing current
shareholders to subscribe to new shares at the same conditions as
the reserved capital increase to DFG and the French State ;
3. Their maturity would be 3 years and the warrants would be
exercisable from year-2. They would be traded on Euronext
Paris;
4. Proceeds from a potential exercise would represent an
additional c. €770 million in case all equity warrants are
exercised.
b. Efficient and balanced governance
Current dual structure would be maintained, the Management Board
is responsible for the definition and the execution of the
strategy. Carlos Tavares is to be appointed as Chairman of the
Managing Board succeeding Philippe Varin on March, 31st 2014.
Upon completion of the contemplated operations, the governance
of the Group would be modified to take into account DFG and the
French State as new shareholders.
The Supervisory Board composition of Peugeot SA would be
balanced and in compliance with the AFEP-MEDEF code. It would be
composed of 6 independent members, 2 representatives of each DFG,
the French State and FFP/EPF, and 2 members representing employees
and employees shareholders. The Supervisory Board would be chaired
by an independent member.
The composition and chairmanship of the various committees would
also be modified, with notably the creation of a committee
overseeing development in Asia which would be chaired by a member
proposed by DFG. The governance committee would be chaired by an
independent member, while the audit committee would be chaired by a
member proposed by the French State and the strategic committee by
a member proposed by FFP/EPF.
DFG, the French State and FFP/EPF would undertake individually
not to acquire any shares of Peugeot SA beyond the initial number
of shares owned post-contemplated operations.
DFG, the French State and FFP/EPF could sell all or part of
their shares freely after a customary lock-up period in-line with
market standards in the context of the rights issue.
Double voting rights would be granted to shareholders following
a holding period reduced from four years (as currently provided for
by the company by laws) to two years, upon approval of PSA Peugeot
Citroën extraordinary general meeting, while FFP/EPF would
undertake to neutralize the impact of its double voting rights for
a period of two years.
DFG, the French State and FFP/EPF will not act in concert in
relation to Peugeot SA.
c. Contemplated capital increase will strengthen PSA
Peugeot Citroën’s balance sheet and investment capacity in order to
implement “Back in the Race” strategic plan
The €3 billion capital increase, together with the renewal of
PSA Peugeot Citroën’s syndicated credit facility of €2.7 billion,
comprising a €2.0 billion five-year tranche, will strengthen the
Group’s balance sheet and liquidity position.
These transactions will also enhance PSA Peugeot Citroën’s
investment capacity, and fund the launch of investments related to
its new « Back in the Race » strategic plan, in order to
strengthen its competitiveness in Europe and its globalization
strategy:
- Debt reduction
- Cost competitive product portfolio and
in depth localization to restore competitiveness in Latin America
and Russia
- Technology including the next
generation Hydrid Powertrain
- CAPEX in capacities:
- New Social Contract commitment in
Europe with €1.5 billion capex expenditures in France
- Extension of competitive manufacturing
footprint for selected products and markets.
Calendar
Dates indicated may change in the future:
End of March
- Registration document to be filed
- Signature of final documentation
Q2 2014
- Approval of regulatory bodies
- PSA Peugeot Citroën Shareholders’ General Meeting
- Processing of Capital Increase and free distribution of
warrants
- Launch of the rights issue
- Implementation of industrial and commercial cooperation with
DFG
--------------------------
Morgan Stanley and Rothschild acted as financial advisors to PSA
Peugeot Citroën for the industrial and commercial partnership with
DFG and the €3.0 billion capital increases. Bredin Prat acted as
legal advisor to PSA Peugeot Citroën for all of these
transactions.
[Banco Santander, BNP PARIBAS, Citigroup, Crédit Agricole
Corporate and Investment Bank, Deutsche Bank, HSBC, Morgan Stanley,
Natixis and Société Générale Corporate & Investment Banking are
acting as Global Coordinators and Joint Bookrunners on the
contemplated rights issue. White & Case LLP acted as legal
advisor to the banks syndicate.
Important information
No communication and no information in respect of this
transaction may be distributed to the public in any jurisdiction
where a registration or approval is required. No steps have been or
will be taken in any jurisdiction (other than France) where such
steps would be required. The issue, the subscription for or the
purchase of Peugeot S.A.’s shares and/or warrants may be subject to
specific legal or regulatory restrictions in certain jurisdictions.
Peugeot S.A. assumes no responsibility for any violation of any
such restrictions by any person.
This announcement is not a prospectus within the meaning of
Directive 2003/71/EC of the European Parliament and the Council of
November 4th, 2003, as amended, in particular by Directive
2010/73/EU to the extent such Directive has been transposed in the
relevant member State of the European Economic Area (together, the
“Prospectus Directive”).
No securities offering will be opened to the public in France
before the delivery of the visa on a prospectus prepared in
compliance with the Prospectus Directive, as approved by the French
Autorité des marchés financiers.
With respect to the member States of the European Economic Area
which have implemented the Prospectus Directive (each, a “relevant
member State”), other than France, no action has been undertaken or
will be undertaken to make an offer to the public of the securities
requiring publication of a prospectus in any relevant member State.
As a result, the new shares and/or warrants of Peugeot S.A. may
only be offered in relevant member States (i) to qualified
investors, as defined by the Prospectus Directive; or (ii) in any
other circumstances, not requiring Peugeot S.A. to publish a
prospectus as provided under Article 3(2) of the Prospectus
Directive.
The distribution of this press release is not made, and has not
been approved, by an “authorised person” within the meaning of
Article 21(1) of the Financial Services and Markets Act 2000. As a
consequence, this press release is directed only at persons who (i)
are located outside the United Kingdom, (ii) have professional
experience in matters relating to investments within the meaning of
Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotions) Order 2005 (as amended), (iii) are persons
falling within Article 49(2)(a) to (d) (high net worth companies,
unincorporated associations, etc.) of the Financial Services and
Markets Act 2000 (Financial Promotions) Order 2005 (as amended) or
(iv) are persons to whom this press release may otherwise lawfully
be communicated (all such persons mentioned in paragraphs (i),
(ii), (iii) and (iv) collectively being referred to as “Relevant
Persons”). The securities are directed only at Relevant Persons and
no invitation, offer or agreements to subscribe, purchase or
acquire the securities may be proposed or made other than with
Relevant Persons. Any person other than a Relevant Person may not
act or rely on this document or any provision thereof. This press
release is not a prospectus which has been approved by the
Financial Conduct Authority or any other United Kingdom regulatory
authority within the meaning of Section 85 of the Financial
Services and Markets Act 2000.
This press release does not constitute or form a part of any
offer or solicitation to purchase or subscribe for securities in
the United States. Securities may not be offered, subscribed or
sold in the United States absent registration under the U.S.
Securities Act of 1933, as amended (the
“U.S. Securities Act”), except pursuant to an exemption
from, or in a transaction not subject to, the registration
requirements thereof. The warrants and the shares of Peugeot S.A.
and rights in respect thereof have not been and will not be
registered under the U.S. Securities Act and Peugeot S.A. does not
intend to make a public offer of its securities in the United
States.
The distribution of this document in certain countries may
constitute a breach of applicable law. The information contained in
this document does not constitute an offer of securities for sale
in the United States, Canada, Australia or Japan.
This press release may not be published, forwarded or
distributed, directly or indirectly, in the United States
(including its territories and dependencies and any state of the
United States), Canada, Australia or Japan.
About PSA Peugeot Citroën
With its two world-renowned brands, Peugeot and Citroën, PSA
Peugeot Citroën sold 2.8 million vehicles worldwide in 2013, of
which 42% outside Europe. The second largest carmaker in Europe,
PSA Peugeot Citroën recorded sales and revenue of €54 billion in
2013. The Group is the European leader in terms of CO2 emissions,
with an average of 116.2 grams of CO2/km in 2013.
PSA Peugeot Citroën has sales operations in 160 countries. It is
also involved in financing activities (Banque PSA Finance) and
automotive equipment (Faurecia).
For more information, please visit
www.psa-peugeot-citroen.com
1 Based on Thomson consensus and CNY/ EUR exchange rate of 8.32
as of 31 December 2013
Media relationsJean-Baptiste Thomas +33 (0) 1 40 66 47
59jean-baptiste.thomas@mpsa.comorPierre-Olivier Salmon +33 (0) 1 40
66 49 94pierreolivier.salmon@mpsa.comorAntonia Krpina +33 (0) 1 40
66 48 02antonia.krpina@mpsa.comorXiaoyan Hua-Schwab +33 (0) 1 40 66
54 22xiaoyan.hua-schwab@mpsa.comorLaure de Servigny +33 (0) 1 40 66
35 42laure.deservigny@mpsa.comorInvestor relationsCarole
Dupont-Pietri +33 (0) 1 40 66 42
59carole.dupont-pietri@mpsa.comorAnne-Laure Descleves +33 (0) 1 40
66 43 65annelaure.descleves@mpsa.comorKarine Douet +33 (0) 1 40 66
57 45karine.douet@mpsa.com
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