According to the Wall Street Journal, Peugeot would be in talks with Banco Santander to sell part of its financing arm or merge it with the bank’s assets.
A possible agreement with Santander would mean that the Spanish bank will assume most of Peugeot’s financing arm, Banque PSA Finance’s refinancing needs and will also put an end to the unit’s reliance on 7 billion euro in state guarantees. The EU antitrust regulators are currently investigating if the guarantees are accordingly to the state aid rules and try to ensure its long-term viability.
The newspaper said that the Spanish bank could own half of Banque PSA and that the deals with other banks might help Peugeot’s financial arm access refinancing in some other countries. Last year Peugeot had to negotiate a government-backed aid for its financing arm after its credit was downgraded several times, due to borrowing costs.
Peugeot is among the automakers worst hit by the auto sales collapse caused by the financial crisis in Europe. The car maker’s restructuring plan includes cutting 10,000 jobs and selling assets worth 2 billion euro. In February, Peugeot Citroen CEO Philippe Varin said that the automaker is on its way to return to profit thanks to spending cuts, Peugeot’s upscale shift and the partnership with GM.