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PSA Peugeot Citroen (UG)’s board will meet Jan. 19 to discuss an investment of about 1 billion euros ($1.4 billion) from Dongfeng Motor Corp. (487) and the French state, people familiar with the matter said.
Dongfeng and the French government would each invest at least 500 million euros in the scenario under discussion, said the people, who asked not to be identified because the negotiations aren’t yet complete. They would both receive about 10 percent of the stock for their cash injection, one of the people said.
Peugeot would later sell shares to bring the overall fundraising to 3 billion euros, the people said. A decision on the size of the rights issue is still under review, and the Sunday meeting may not lead to a definitive agreement, the people said. Pierre-Olivier Salmon, a Peugeot spokesman, and Zhou Mi, a Dongfeng spokesman, declined to comment.
The controlling Peugeot family, which has run the automaker for 118 years, is divided over whether to accept the agreement, the people said. The family owns about 25.5 percent of the Paris-based carmaker’s stock and would probably end up with about 15 percent of the company after its holding is diluted through a capital increase, one of the people said.
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