FX.co ★ China to rescue Peugeot from crash

France’s government arrived at a decision to give a hand to the national carmaker. The Cabinet is going to purchase a 14% stake in PSA Peugeot Citroen investing €800 million (or $1.1 billion). The negotiations on the similar deal with Dongfeng Motor Group Ltd were success. Such a share sale is a part of the restructuring plan to attract investments and boost the French automaker’s growth. Besides, Peugeot will float additional shares. All in all, the second-largest carmaker in Europe is going to bump up its capital by €3 billion. To achieve all the goals, the Peugeot family had to dilute its 25.4% stake to 14%. So, the Chinese car manufacturer, French government, and Peugeot itself are equal shareholders. Meanwhile, another giant GM Automotive Holdings is also among the stockholders having a 7% stake. So, what is all the fuss about? The thing is the last year was rather tough year for Peugeot. According to the financial reports, the company lost €2.31 billion in 2013 compared to a 5-billion loss a year earlier. Nevertheless, these figures make the French worry. In the meantime, the sales came in at €54.1 billion. The Peugeot board intends to recover from the stagnation aftermath and add to the annual sales 1.5 million units in cooperation with Dongfeng Motors by 2020.