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2014-02-07 08:57

EAST MEETS WEST? Peugeot has announced it will go ahead with its Chinese tie-up with Dong Feng for a much-needed cash injection. Image: Peugeot

PARIS, France - The board of embattled French automaker Peugeot has reiterated Thursday that it will persevere, despite a split on the issue within the Peugeot family, a tie-up with China's Dong Feng and the French state.

Reports had emerged that chairman Thierry Peugeot and smaller shareholders were against the restructuring that would bring Peugeot an urgently needed cash injection equivalent to R44-billion.

If completed, the plan would give Dong Feng, the French state and the Peugeot family each a 14% stake in the auto group, Europe's second largest after Volkswagen.

The lifeline project is championed by Robert Peugeot, head of the family's holding company, as well as outgoing chief executive Philippe Varin, the man often blamed for having guided the company into its current turmoil.

Varin, whose contract was extended to March 2014 according to the brief statement said, is to be replaced by former Renault executive Carlos Tavares once the restructuring is complete.

The company is expected to provide more details on the tie-up when it publishes annual results later in February 2014 and ahead of a visit to Paris by Chinese president Xi Jinping.

A 2013, a French government-ordered enquiry found that the group had made strategic mistakes for years by not seizing fully the opportunities of globalisation.
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