PARIS -- The board of troubled French carmaker PSA Peugeot Citroen (IW 1000/55) is set to review on Sunday different formulas for China's Dongfeng and the French state to become major shareholders.
Several scenarios are on the table on how to carry out the capital hike of around 3.5 billion euros ($4.7 billion), according to two sources familiar with the plans.
Europe's second-largest carmaker has been looking to shore up its finances and secure a stronger beachhead in the world's top car market since the slump in European auto sales forced it to seek a state bailout for its finance arm in 2012.
The first scenario under consideration, which until recently had been seen as the most likely, would have had Dongfeng and the French state each inject 1 billion euros into PSA.
The remaining 1.5 billion would be offered publicly, without the Peugeot family, which currently controls 38% of the votes in the company, taking part.
A new scenario, according to one of the sources, would have the Peugeot family, French state and Dongfeng each investing the same amount, with the rest of the shares offered publicly.
The source said the most likely investment amount was 500 million euros each, a figure also advanced by Le Monde, which first reported on the option being considered.
After the increase, they would each have a stake of 12% to 15% in the automaker.
Le Monde said the banks advising the carmaker believe it can place between 1.5 billion and 2 billion euros' worth of shares on the market.
But the outcome of Sunday's board meeting was not certain, according to the source, with much depending on the amount to be floated publicly.
PSA hopes to be able to present the outline of a deal with Dongfeng and the French state to investors when it discloses its annual results on Feb. 19, added the source.
The carmaker hopes the deal will be sealed before a visit by the Chinese president to France planned for the second quarter of this year.
A PSA spokesman declined to comment on the information, referring to a statement last month that the carmaker was exploring options with its partners, including Donfeng, with a capital hike one of the possibilities under consideration.
Dongfeng, for its part, has only said that it is studying the rationality of taking a stake in Peugeot.
Last month Dongfeng signed a $1.3 billion (960 million euro) joint venture agreement with PSA's French rival Renault (IW 1000/80) that will give it a manufacturing presence in the China after a decade of not assembling vehicles there.
U.S.-based General Motors (IW 500/5) sold off its 7% stake in PSA last month, saying the French carmaker no longer needed its support, although their alliance in Europe is set to continue.
The news of the Sunday meeting helped Peugeot's share price, which jumped 2.2% to close at 11.48 euros.
Copyright Agence France-Presse, 2014
