Peugeot family to vote on carmaker's future on Monday

Sun Feb 16, 2014 8:11am EST
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By Gilles Guillaume

PARIS (Reuters) - The Peugeot family, the largest shareholder in PSA Peugeot Citroen (PEUP.PA: Quote), will meet on Monday to decide whether to give its blessing to two deals aimed at securing the French carmaker's future, a source close to the matter said.

The family's consent is needed so PSA can announce, alongside 2013 results on Wednesday, a memorandum of understanding (MoU) on a recapitalization deal under which the French state and Chinese partner Dongfeng (0489.HK: Quote) will both take direct stakes in the group.

Peugeot is also expected to announce a separate European car loans alliance with Spain's Banco Santander (SAN.MC: Quote).

Both projects will be on the table of board meetings of the Peugeot family holdings FFP and Etablissements Peugeot Freres on Monday, a source close to the family said.

"They will decide their position on both the MoU and the Santander project," the source said.

Peugeot, battered by a prolonged slump in demand for cars in Europe and sustained by 7 billion euros of state guarantees, has been in talks with Dongfeng for months over a rescue plan that would see the Chinese automaker and French government take matching stakes.

Sources familiar with the matter told Reuters after a new round of talks in China this week that PSA reached an outline deal with Dongfeng and the French state to raise up to 4 billion euros ($5.5 billion) in fresh capital and deepen cooperation with the Chinese carmaker.

The Peugeot clan, which has controlled the company since the early days of the automobile in the 19th century, currently has a 25 percent stake commanding 38 percent of voting rights.   Continued...

Thierry Peugeot, chairman of PSA Peugeot Citroen's supervisory board, attends the company's annual shareholder meeting at Peugeot headquarters in Paris April 24, 2013. REUTERS/Charles Platiau