PSA Peugeot Citroen, Dongfeng and the French government have reached an outline deal to raise $5.5 billion in capital through a planned share sale in a last-ditch effort by PSA to remain alive after General Motors walked out of a similar deal over the Iranian market last year.
Reuters reports the deal will be presented to the Peugeot board February 18, at which point the board will sign a non-binding memorandum of understanding that same day according to sources closest to the matter. The plan would allow Dongfeng and the French government to each own 14 percent of PSA, while the two automakers retain and expand upon their alliance toward their goal of penetrating further into the Southeast Asia market.
With most of the plan settled, the only item needed to pull everything together is an independent chairman who will oversee the plan’s implementation. The French government wants senior civil servant Louis Gallois, brought aboard under the existing agreement between the state and PSA since 2012, as their champion, while Dongfeng is pushing for French businesswoman and independent Peugeot director Patricia Barbiezt to fulfill the role.