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Report: China's Dongfeng mulls options for $2.5B Peugeot stake, including sale

Chinese state-owned automaker Dongfeng Motor Group Co. Ltd. is considering options for its $2.5 billion shareholding in Peugeot SA parent Groupe PSA, including a potential sale, Bloomberg News reported Aug. 7, citing people with knowledge of the matter.

Dongfeng has reportedly held talks with potential advisers in recent weeks to discuss how it could monetize part or all of its 12.2% stake in the French carmaker.

The talks included a potential sale of its shares or the issuance of exchangeable bonds backed by PSA stock, the sources told Bloomberg.

They reportedly added that Dongfeng plans to continue its Chinese venture with PSA even after it proceeds with the divestment.

A Dongfeng representative told Bloomberg that the company does not have any information regarding the plan at the moment, while PSA representatives, the Peugeot family and the French finance ministry declined to comment, the news outlet said. The Peugeot family and the French state each own 12.2% of PSA.

Deliberations are at an early stage, and there is no certainty that the talks will lead to a deal, the report added.

Peugeot's stock closed down 0.80% to €19.80 in Paris before the report came out, while Dongfeng Motor shares were up 8.17% to HK$6.75 in mid-day trading in Hong Kong.