Shareholders of PSA Peugeot Citroën on Friday endorsed a 3 billion euro (US$4.15 billion) capital injection proposal that paves the way for the French state and China’s Dongfeng Motor Corp. to acquire sizeable stakes in the automaker, the Wall Street Journal reported.
Shareholders approved a two-step operation with a reserved capital increase of 1.05 billion euro, followed by a 1.95 billion euro rights issue. Dongfeng and the French state will become major investors in Peugeot with stakes of 14 percent each, alongside the founding Peugeot family, the report said.
The big new investors will nominate two board members each under terms of the agreement ratified by shareholders.
The capital injection comes as Peugeot, France’s largest automaker by sales volume, is struggling to return to profit after racking up more than 7 billion euro of net losses in the past two years. The company has been working to reduce its dependence on the weak European market and expand its sales and presence in faster-growing markets in Asia and elsewhere, the Journal noted.
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