China's Dongfeng and Peugeot to agree on capital tie-up: source

[Wireless News]

http://l3.yimg.com/bt/api/res/1.2/HJHAgolXwBdxse3ReLp7JQ--/YXBwaWQ9eW5ld3M7Zmk9ZmlsbDtoPTg2O3E9NzU7dz0xMzA-/http://media.zenfs.com/en_us/News/Reuters/2014-02-18T025228Z_1_CBREA1H07ZK00_RTROPTP_2_CBUSINESS-US-DONGFENG-PEUGEOT.JPG (http://news.yahoo.com/china-39-dongfeng-peugeot-agree-capital-tie-source-025228933--sector.html)By Samuel Shen and Kazunori Takada SHANGHAI (Reuters) - China's Dongfeng Motor Group Co Ltd and PSA Peugeot Citroen will agree on Tuesday to a capital tie-up as part of a broader 3 billion euro fundraising that will end the Peugeot family's control of the 200-year-old French carmaker, a source said. A non-binding memorandum of understanding will be signed whereby China's second-biggest carmaker and the French government each will inject 800 million euros ($1.10 billion) for 14 percent stakes in PSA Peugeot , a Dongfeng executive with direct knowledge of the talks told Reuters. Peugeot will also sell new shares to existing shareholders, bringing the total fundraising effort to 3 billion euros ($4.1 billion), the source said, confirming earlier Reuters' reports. The rescue deal will help Peugeot - founded in 1810 as a maker of tools and coffee grinders - survive the withdrawal next year of 7 billion euros in state guarantees to its sales financing arm, which are keeping the French firm afloat.



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