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French Government Considering Selling PSA Group Stake Photo:

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Kez Casey | May, 26 2016 | 1 Comment

Reports out of Europe indicate that the French government may be considering offloading some or all of its 14 percent stake in Groupe PSA, the parent company of Peugeot, Citroen, and DS Automobiles.

The possible sale, reported by French financial paper Les Echos, comes as the French government looks to rearrange finances in a bid to provide financial support to embattled government-owned power generation companies.

The PSA stake is considered a good candidate for sale, owing to Groupe PSA’s financial turnaround, going from reporting an €8 billion loss in 2012-2014, to a €1.2 billion profit at the end of 2015.

Chairman of the Groupe PSA board, Carlos Tavares
Chairman of the Groupe PSA board, Carlos Tavares

The company share price has almost doubled since the French government bought its €8oo million stake almost two years ago, making the sale of part or all of the government stake a potential windfall.

The only counterpoint to the plan is Chinese automaker Dongfeng’s 14 percent stake, which formed part of the same capital injection package in 2014, the two investors holding an equal stake to provide an ownership balance.

Before any sale can go ahead, however, there are a number of hurdles within the French government’s typically strict corporate ownership regulations.

MORE: Groupe PSA | Dongfeng | Peugeot

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