Business

Peugeot shares plunge on report of fund raising

  • 14 October 2013
  • From the section Business
Peugeot factory
Image caption The auto sector employs 100,000 workers in France

Shares in Peugeot Citroen plunged 10% on Monday on reports that the company is considering raising funds by selling shares.

Reports say the company is looking to raise 3bn euros (£2.6bn; $4.1bn) and would involve the French government and China's Dongfeng Motor.

If that happened, the Peugeot family could lose control of the company.

The news agency Reuters reported that a draft agreement is in place and could be agreed by the end of the year.

Previously Peugeot has said it is in negotiations with "different partners", but that talks are not advanced.

"There is no great secret, Peugeot is on the look-out for partners," Finance Minister Pierre Moscovici told French radio.

"PSA's financial situation is not difficult. The main thing is making sure there is an industrial logic to this."

Peugeot is Europe's second biggest car maker after Volkswagen and has been struggling with a slump in the European car market.

More on this story