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.