Peugeot Citroen Confirms Talks with Possible Partners, No Deal Sealed Yet

By Inti Landauro

PARIS--Ailing French car maker PSA Peugeot Citroen (UG.FR) Monday confirmed it is talking with possible partners for new industrial or commercial projects that will likely have financial consequences, though it said no agreement has been reached yet.

The company didn't identify any of the potential partners it is talking to.

Peugeot Citroen released the statement hours after The Wall Street Journal reported the company's board will later this month consider a potential capital injection from Chinese partner Dongfeng Motor Corp. (0489.HK).

Battered by dwindling sales in Europe, its core market, Peugeot is continuing to rack up losses and is burning cash that it badly needs to develop new products and expand its industrial footprint outside Europe.

Peugeot's board meeting, set for Oct. 22, comes after months of talks with Dongfeng about a potential expansion of their existing partnership outside China, including an investment in Peugeot, people familiar with the matter said.

The French government could also participate in a capital increase alongside Dongfeng, to help fund its development projects after 2016, though Peugeot hasn't formally asked it to do so, one of the people added.

-David Pearson contributed to this article.

Write to Inti Landauro at [e-mail]

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