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article imagePeugeot presses on with tie-up despite family split

By AFP     Feb 6, 2014 in Business

The board of embattled French carmaker Peugeot reiterated Thursday that it was pressing on with a tie-up with China's Dong Feng and the French state despite a split on the issue within the Peugeot family.

Reports had emerged that chairman Thierry Peugeot and smaller shareholders were against the restructuring that would bring Peugeot an urgently needed 3 billion euro ($4.0 billion) cash injection.

If completed, the plan would give Dong Feng, the French state and the Peugeot family each a 14 percent stake in the auto group, which is 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 guiding the company into its current turmoil.

Varin, whose contract was extended to March 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 this month and ahead of a visit to Paris this spring by Chinese President Xi Jinping.

Last year, 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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