Peugeot reports 5.0% annual sales fall, approves capital rise

January 20, 2014
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The Peugeot logo on a Peugeot 308 at the new assembly line inauguration in Douvrin, norther France/AFP
The Peugeot logo on a Peugeot 308 at the new assembly line inauguration in Douvrin, norther France/AFP
PARIS, Jan 20 – French carmaker Peugeot Citroen said global sales fell by 4.9% in 2013, to 2.82 million vehicles, on weakness in its main markets Europe and Russia, the company announced on Monday hours after approving a capital increase.

Peugeot Citroen has also ceased operations in Iran for two years, which has been an important market for the group.

Its proportion of sales outside Europe rose from 38.0 percent to 42.0 percent in 2013, and the carmaker said this was “in line with its objective of achieving 50 percent of sales outside Europe in 2015,” according to a statement.

Meanwhile, French financial newspaper Les Echos reported that PSA Peugeot Citroen would issue new shares at 7.8-8.0 euros each, enabling the French state and Chinese group Dongfeng to inject about 750 million euros.

Late on Sunday the supervisory board of PSA approved the principle of a 3.0-billion-euro ($4.0 billion) capital increase as part of the group’s efforts to recover from financial crisis.

On Friday the price of shares in the group had closed at 11.48 euros, valuing the business, the second-biggest auto maker in Europe after the German Volkswagen company, at 4.1 billion euros.

Under the planned capital increase the French state and Dongfeng would each acquire 14.0 percent of the company, the newspaper reported.

The Peugeot family, the biggest shareholder with 25.4 percent of the capital, would retain an interest of 14.0 percent by means of subscribing for shares worth 100 million euros, the Journal du Dimanche paper reported.

The exact amount of subscription by each party would depend on the amount of shares offered to the public and on the price of the shares, a source close to the matter said.

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