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        Business / Auto Global

        France pledges Peugeot to stay French after fundraising

        (Agencies) Updated: 2014-01-21 11:03

        France pledges Peugeot to stay French after fundraising

        A Peugeot company logo is seen outside an automobile dealership in Paris December 13, 2013.?[Photo/Agencies]

        France's finance minister pledged to make sure PSA Peugeot Citroen stays French, hours before a supervisory board meeting on Sunday to consider a fundraising that is likely to change the ownership structure of the loss-making carmaker.

        Peugeot last month agreed to enter final talks on an equity fundraising that would see China's Dongfeng Motor and the French state each take about 20 percent stakes, with the Peugeot family's shareholding cut to 15 percent from 25 percent, a source familiar with the matter said then.

        "PSA must remain a major French carmaker, and the state is very attached to the subject," Pierre Moscovici told France's Radio J, reiterating that the state had already given a 7 billion euro ($9.5 billion) guarantee to PSA's finance arm.

        "The state is particularly vigilant, the state feels involved, it will do everything and use its influence to ensure PSA remains a major French carmaker and finds the means to develop."

        Peugeot needs to find "even more solid industrial alliances" as well as strengthening those it has already with US carmaker General Motors?and Dongfeng, the minister added.

        Peugeot is cutting jobs and plant capacity in an attempt to halt losses inflicted by Europe's economic problems, which have included six straight years of declining new car sales.

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