PSA and Dongfeng sign capital tie-up deal
PSA unveils Dongfeng deal with 2013 loss
PARIS (Reuters) — PSA/Peugeot-Citroen today unveiled a 3 billion euro ($4.1 billion) capital tie-up with China’s Dongfeng Motor Group and said the cash injection would buy time for a recovery after the company posted a further loss for 2013.
Dongfeng and the French state will each pay 800 million euros for 14 percent of the carmaker to match the founding Peugeot family’s reduced holding, PSA said today in a statement, confirming earlier reports.
PSA said its full-year net loss narrowed to 2.32 billion euros from 5.01 billion in 2012, when the bottom line was hit by asset writedowns. Sales fell 2.4 percent to 54.09 billion euros.
The company unveiled new goals for its partnership with Dongfeng but warned that it may not halt losses until 2016 — a year later than initially promised.
“Everything is in place to give Peugeot a new lease of life as a major international carmaker,” Chief Financial Officer Jean-Baptiste de Chatillon said on a conference call.
“We have the products, the teams, the know-how and now we have a new balanced and stable ownership,” he said.
The loss at PSA’s core auto division narrowed 30 percent to 1.04 billion euros — and net debt rose by about the same figure to 4.15 billion — as drastic investment cuts failed to halt the red ink.
But operational cash consumption came in at 426 million euros, outperforming the company’s goal of cutting the previous year’s 3 billion cash burn at least by half.
PSA’s net loss was deepened by an emerging market currency plunge.