By David Pearson
PARIS--French car maker PSA Peugeot Citroen (UG.FR) confirmed
Thursday that it is studying an eventual capital increase and that
it is talking to other possible partners, including China's
Dongfeng Motor Group Co. (0489.HK), about new industrial and
commercial projects.
Peugeot has been widely reported as considering a substantial
capital increase of around 3 billion euros to be able to fund its
future development outside the European automobile market, which
has been crippled by a six-year downturn. The plan, according to
people familiar with the matter, is for Dongfeng and the French
state to take equal shareholdings of 20% in Peugeot's capital. The
capital increase would have a portion reserved for existing
shareholders, according to one source.
The company said there has been no agreement on the terms of
eventual projects and gave no details of the planned capital
increase, saying the discussions are at a preliminary stage and
there is no guarantee that they will be concluded.
People familiar with the discussions said financially fragile
Peugeot and its longstanding partner Dongfeng want to give their
industrial and commercial partnership in China a new dimension,
sharing costs as they seek to expand into fast-growing emerging
markets in Southeast Asia and Latin America.
Write to David Pearson at david.pearson@wsj.com
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