The head of French carmaker PSA Peugeot Citroen has said he expects Opel to continue losing money this year.
PSA is buying German based Opel, and the British part of the business Vauxhall, from General Motors.
Chief Executive Carlos Tavares told shareholders at PSA’s annual general meeting in Paris: “A certain number of good achievements have been made under General Motors’ leadership, but we must recognise that the losses are real and probably will be again in 2017.”
Tavares, who is betting that bigger will be better, repeated his pledge that the Opel-Vauxhall purchase will create a new “European automotive champion” second only to Volkswagen.
PSA agreed in March to acquire Opel in a deal valuing the loss-making GM European arm at 2.2 billion euros.
AG de PSA : les conditions de l’achat d’Opel à GM approuvées à presque 100%. Quelques applaudissements pic.twitter.com/AjuOWcYKz0— Eric Béziat (@ericbeziat) 10 May 2017
At the meeting, PSA shareholders voted overwhelmingly to approve the issue of share warrants forming part of the payment to GM for Opel-Vauxhall.
Valued at 670 million euros when the deal was struck, the warrants convert to shares in the French carmaker in five years at the earliest, maintaining a financial incentive for GM’s continued cooperation with a PSA-owned Opel-Vauxhall.
Tavares entrusts PSA’s U.S. return to an ally: Carlos Tavares, fresh from his acquisition of Opel/Vauxhall, is… https://t.co/jA1Xh7N1Sl— Thai Qashqai Club (@ThaiQashqaiClub) 10 April 2017