French carmaker Peugeot Citroen unveiled a €3 billion capital tie-up with China’s Dongfeng and said the cash injection would buy time for a recovery after losing another €2.32bn in 2013.
Dongfeng Motor Group and the French state will each pay €800 million for 14 per cent of the carmaker to match the founding Peugeot family’s reduced holding, Peugeot said on Wednesday, confirming earlier reports.
The company unveiled new goals for its partnership with Dongfeng but warned that it may not halt losses until 2016 — a year later than initially promised.
“Everything is in place to give Peugeot a new lease of life as a major international carmaker,” chief financial officer Jean-Baptiste de Chatillon said on a conference call.
“We have the products, the teams, the know-how and now we have a new balanced and stable ownership.”
The loss at Peugeot’s core auto division narrowed 30 per cent to €1.04bn - and net debt rose by about the same figure to €4.15bn - as drastic investment cuts failed to halt the red ink.
But operational cash consumption came in at €426m, outperforming the company’s goal of cutting the previous year’s €3bn cash burn at least by half.
The net loss, which compares with a €5bn deficit hit by asset writedowns in 2012, was deepened by an emerging market currency plunge that also contributed to a 2.4 per cent decline in group sales to €54.09bn.