Dongfeng Motor requests trading halt as French and Peugeot officials due in China
Reuters in Shanghai
China’s Dongfeng Motor Group, which is in talks to buy a stake in French carmaker PSA Peugeot Citroen, asked on Monday for a trading halt pending an announcement concerning “inside information”.
Dongfeng, which already has a joint venture with Peugeot in China, did not give further details, and company spokesman Zhou Mi said he was not aware of the reason behind the suspension.
The halt comes after sources in France said on Friday that Peugeot negotiators and French government officials will be in China this week for what they hope will be a final round of negotiations on the tie-up with the country’s second-biggest carmaker.
The sources said that in the proposed deal, the Chinese carmaker and the French government would take matching stakes in the Paris-based company through a 3 billion euro (HK$31.7 billion) share issue.
The final push for an agreement, due to be presented to the French carmaker’s board on February 18, follows public discord among members of the founding Peugeot family and protests from minority shareholders over the planned capital increase.
It was not immediately clear whether the final agreement, if reached, would be between Peugeot and Dongfeng or its unlisted, state-owned parent, Dongfeng Motor Corporation.
Crippled by Europe’s six-year market slump, Peugeot has said it needs fresh funding to survive in the medium term. The company’s financing arm is already being kept afloat by a 7 billion euro loan guarantee from the French state.
Zhang Yuguang, China-based spokesman for Peugeot, said he was not aware of a trip to China by company negotiators.