Peugeot shareholders approve Dongfeng, French state's stakes
PARIS - Agence France-Presse
Peugeot needs new capital to climb away from near disaster and develop innovative hybrid engine technology.Shareholders of French auto giant Peugeot Citroen on Friday approved a 3-billion-euro capital injection in a move that hands partial control to Chinese automaker Dongfeng and the French state.
Under the deal, Dongfeng and the French state would contribute 1.048 billion euros in capital. The second part of the injected funds reaching 1.952 billion would come from all of the group's shareholders, including the French state and Dongfeng.
France and Dongfeng -- China's second biggest automaker and controlled by the Chinese state -- would then hold 14 percent of the company each, on par with the Peugeot family.
Peugeot, the biggest auto group in France with about 90,000 employees, desperately needs new capital to climb away from near disaster and develop innovative hybrid engine technology. It has already been effectively rescued by the French state with guarantees of 7.0 billion euros for its credit arm.
Earlier Friday, it reported a rise in sales in the first quarter of this year.
Sales revenue rose by 1.9 percent to 13.3 billion euros ($18.4 billion), despite unfavourable exchange rates, and the number of vehicles sold rose by 7.7 percent from the equivalent figures last year.
The number of vehicles sold totalled 726,000, with a boost from the group's two main markets in Europe and in China.
PSA Peugeot Citroen said that it had raised sales in Europe by 16.0 percent and in China by 18.3 percent.
But sales fell in Russia and in Latin America.
The group estimated that this year the European market, pulling away from a deep downturn, would grow by about 3.0 percent, and that the Chinese market would rise by 10 percent.
But the Latin American market would shrink by 7.0 percent and the Russian market by 5.0 percent.