French Government Said It Seeks Investment Bank for PSA image

French finance ministry confirmed reports that it was seeking outside advice regarding the delicate situation with PSA Peugeot Citroen.

A French newspaper published a report according to which the government plans to appoint an investment bank as a solution for PSA Peugeot Citroen. This could mean that the French automaker plans to sign the deal for a closer alliance with GM or Dongfeng Motor.

“As the guarantor of the BPF (PSA’s finance arm), the government is closely monitoring the company’s progress and is taking advice when needed,” a finance ministry official said on Friday.

Anonymous sources recently said that PSA’s founding family is willing to give up control of the company for a closer alliance with GM backed by a fresh investment. Peugeot is among the automakers worst hit by the financial crisis in Europe, unfortunately an alliance between the automaker and GM would face major political hurdles as this would mean more plant closures and job cuts in Germany and France.

“The first-half sales weren’t so bad, and the company seems to be getting its cash burn under control,” said Sascha Gommel, an analyst at Commerzbank in Frankfurt. “There’s also an expectation that Peugeot will move to find a partner.”

Source: Autonews