Peugeot looking to raise €3B

|About: Peugeot S.A. (PEUGF)|By:, SA News Editor

PSA Peugeot Citroen (PEUGF) is in talks with Chinese partner Dongfeng Motor and the French state over raising €3B ($4.1B) so it can invest in new models and growth markets, the struggling carmaker said yesterday.

Dongfeng and France would provide at least €750M each in exchange for 14% apiece, Bloomberg reports. Peugeot's controlling family would invest €100M in order to retain a stake of 14% vs 25.5% currently. However, the family is divided over whether to accept the deal.

The company would also hold a rights issue of €1.4B.

Peugot hopes to a seal the agreement by February 19, when it is due to disclose its annual earnings. The deal would mark a shift away from its not overly successful partnership with GM.