|Peugeot shares tumble over Dongfeng capital infusion
Peugeot Citroen is launching radical crisis action, raising capital to tie-up with Dongfeng and the French state, but its shares plunged today in Paris.
The supervisory board of PSA Peugeot Citroen agreed on the capital restructuring late on Sunday following the exit of US giant GM, sources told AFP.
But newspaper reports said that the capital increase would be big at about 3 billion euros relative to the group's value on Friday of about 4.1 billion euros.
And the new shares enabling Dongfeng and the government each to acquire about 14 percent of the group would be made at a discount of up to 35 percent.
Shares in PSA Peugeot Citroen plunged by 5.44 percent 10.86 euros in initial trading today in Paris.
Under the reported terms, the Peugeot family, the controlling shareholder with 25.4 percent of the capital, would retain an interest of 14 percent by means of subscribing for shares worth 100 million euros.
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 said.
The reports said that the new shares would be issued at 7.5-8 euros each, enabling the French state and Dongfeng to inject about 750 million euros.
On Friday the price of shares in the group had closed at 11.48 euros.