Dongfeng will sell its stake in PSA due to falling salesApril 2, 2020
Chinese Dongfeng Motor Group is considering an agreement with PSA to reduce its stake in the French concern after falling stock prices caused by the coronavirus pandemic.
Dongfeng agreed to lower its 12.2% stake in PSA by selling 30.7 million shares to a French firm to help smooth out a drop in sales. The cost of the package was about 680 million euros (744 million dollars), and as a result of the sale, Dongfeng will own about 4.5% of the combined PSA-FCA group.
However, in a conversation with investors about earnings, a Dongfeng official said that the Chinese company is considering a similar option. “There is a chance that the plan for the sale of shares will change. We assess the problem, ”the official said on Tuesday during a conversation.
A paper submitted by Reuters revealed that Dongfeng and PSA plan to cut jobs at the DPCA in Wuhan and cut the number of car plants to make the joint venture more profitable.
The coronavirus pandemic excited stock and debt markets, which led to a halt in transactions, including the purchase of Navistar’s VW truck division and Borgwarner’s attempt to close a deal with Delphi.
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