Peugeot Plans New Capital Increase image

LA Tribune newspaper said that PSA Peugeot Citroen plans a new capital increase after spending 2.5 billion euro cash in 2012.

A new capital increase is a necessary measure but also one that would reduce the Peugeot family’s stake in the troubled automaker. Currently the Peugeot family owns 25% of the company and 38% of its voting rights. A Peugeot spokesman said the report is based on rumors.

Last week PSA Peugeot Citroen said that demand in Europe for new vehicles has begun to stabilize, after deliveries increased in April for the first time in the past 19 months. Maxime Picat, head of the manufacturer’s Peugeot brand, said that competition in Europe becomes tougher as more automakers are offering big incentives.

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. Last week Peugeot’s workers at the Aulnay plant accepted to end the 4-month strike held for the plant’s closure. The strike involved 130 workers out of the plant’s 2,500 employees.

Peugeot relies on the new models, such as the 208 small car, the 2008 SUV and the upcoming 308, to boost sales, but it will still lay off 8,000 workers in France and close the Aulnay plant, near Paris, part of its restructuring plan.

Source: The Economic Times