PARIS (AFP) - Peugeot Citroen halved losses last year, the car giant announced on Wednesday along with a shareholder tie-up with China's Dongfeng and the French state ending one of France's oldest industrial dynasties.
The shareholder deal, tied up late on Tuesday, means that Peugeot Citroen will raise at least 3.0 billion euros (S$5.2 billion) of new capital with the issue of new shares.
The stricken group, counting on the Chinese market and new hybrid compressed-air technology, revealed the biggest steps so far in its strategy to climb out of a crisis which brought it close to disaster.
Net losses last year still amounted to 2.3 billion euros, but that was less than half the figure of 5.0 billion euros in 2012.
That was after the 200-year-old group, the second-biggest carmaker in Europe, took a series of crisis cost-cutting measures to save 1.5 billion euros.
The group, criticised by a government inquiry for missing opportunities of globalisation for many years, declared that this new chapter would accelerate "its globalisation and emerging markets expansion strategy, while reinforcing its financial strength". The group had been burning up cash so fast that the French government had become concerned about its capacity to survive, but wanted to ensure it remained under majority French control.
In the latest buy-in of a Chinese giant to a struggling Western firm, Peugeot announced that Chinese state-controlled Dongfeng and the French government would each inject 800 million euros for 14 per cent stakes in the company.
The Peugeot family, which has controlled the firm since its founding in 1810 as a maker of coffee mills and bicycles, will see its 25 per cent stake and 38 per cent voting rights diluted to the same amount as the stakes for the government and Chinese state-controlled Dongfeng.