PSA Peugeot Citroen has unveiled annual losses of 2.32 billion euros, overshadowing a rescue deal reached with China’s Dongfeng and the French government.
There was a narrowing of its net loss last year and it is not burning through cash so fast but the French carmaker warned it may not stem the red ink until 2016, a year later than it had initially promised.
Peugeot plans to use new capital from a share sale to Dongfeng and the Paris government to catch up in hybrid technology and low-cost cars.
It will also target Asian and Mediterranean markets.
The long-awaited three billion euro fundraising will bring it new leadership, more time to turn itself around and an end to two centuries of control by the Peugeot family.
Peugeot confirmed that Dongfeng Motor Group and the French state will each pay 800 million euros for 14 percent of the carmaker to match the founding Peugeot family’s reduced holding.
Chief Financial Officer Jean-Baptiste de Chatillon said: “Everything is in place to give Peugeot a new lease of life as a major international carmaker. We have the products, the teams, the know-how and now we have a new balanced and stable ownership.”
Under their framework deal, Peugeot and Dongfeng pledged to expand their existing joint venture, adding new models to target 1.5 million annual vehicle sales in 2020, and generate 400 million euros of savings for the French partner.
But already there are signs of strain in the new “three-headed” ownership over who will be Chairman of the company.
Dongfeng said the Peugeot board is “expected to be chaired by an independent member,” while France is pushing senior civil servant Louis Gallois as its candidate.