The headlines are now all about the 3 billion euro ($4.1 billion) capital deal with China’s Dongfeng and the French state, but we should also note that PSA is still on the losing side, reporting a 2013 loss of 2.32 billion.
The company officially unveiled its plan to raise the 3 billion euro ($4.1 billion) amount by issuing new shares – Dongfeng Motor Group and the French state will each give 800 million euros for 14% stakes, which will become equal to Peugeot’s family stake, diluted from the 25.4% and 38% voting rights. The rest of the money will come from another preferential share issue to existing shareholders, which are allowed to purchase stakes at the same price as Dongfeng and the French state.
“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.”
PSA’s plan also posted new goals for the partnership with Dongfeng, while also warning that loses could be stopped in 2016, a year later than expected. Net debt went up to 4.15 billion euros, while the core auto division narrowed losses by 30% to 1.04 billion. Still, outperforming the company’s goal of cutting in half last year’s 3 billion cash consumption, the operational cash loss was down to 426 million euros.