France considers selling its PSA shares, report says image

The French government is mulling the idea of giving up on its stake in Peugeot-Citroen, according to a recent report from the Les Echos newspaper.

Peugeot-Citroen was on the verge of bankruptcy just two years back, reporting big loses from 2012 to 2014, when it was saved by the French government and China’s Dongfeng Motor, both buying a matching 14.1 percent stake of the auto group. Since then, the company has managed to steadily grow and recover thanks to the revival plan put together by PSA’s Chief Executive Carlos Tavares. With the rough times behind them now, the Les Echos daily financial paper said the state was now weighing the possibility of selling its entire stake, or just a part of it, as the government has other worries to take care of, such as helping some newly troubled state-owned companies. With PSA back on profit, the value of the government’s PSA stake has nearly doubled. However, the main issue around a possible selling move is leaving Dongfeng by its own, shifting the power balance.

Meanwhile, the agreement between PSA Group and its Chinese partner appears to be moving further and both companies are working to develop a new, small-car platform for expanding their lineup and boosting sales in Asia and China. They are also planning to use that Common Modular Platform for all-electric cars from 2019. As for PSA’s financial targets, it aims to boost by 10 percent the Group’s revenue in two years, from 54.7 billion euros in 2015, eyeing an additional 15 percent increase by 2021.

Via Reuters