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Peugeot launches €1bn rights issue to fund alliance with GM

New shares will be listed on 29 March.

The French car maker PSA Peugeot Citroën has launched a €1bn rights issue to finance its alliance with General Motors (GM), aimed at leveraging the combined strengths and capabilities of the two companies.

The alliance was formed in February.

Shareholders of Peugeot can purchase 16 new shares for every 31 shares held, at a subscription price of €8.27 per share.

The offer will last between 8 and 21 March. The new shares will be listed on 29 March 2012.

Jean-Baptiste de Chatillon, CFO at Peugeot, said: “The capital increase is entirely designed to finance Peugeot’s strategic project with GM and will allow it to pursue its global expansion strategy and its plan to move its model range upmarket.”

Philippe Varin, CEO of PSA, said that the company planned to use the proceeds of the share offer to launch a new low-carbon small car platform and expand in emerging markets with its US partner.

Société Générale, Morgan Stanley and BNP Paribas are arranging the rights issue.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.