PSA Board to Discuss Dongfeng Investment Plan

PSA Peugeot Citroen's directors will meet on Sunday to decide on a combined €1 billion investment in the company from Chinese partner Dongfeng Motor Co. and the French government, according to Bloomberg News.

Unnamed sources tell the news service that negotiations are not complete. Dongfeng and France each would receive a 10% stake in PSA. They say the carmaker would later sell new shares to bring the total fundraising to €3 billion.

PSA hasn't generated positive cash flow since 2010 and is projected to have about €9.8 billion in cash by midyear. Analysts have said the company must soon stop spending more than it collects to avoid collapse.

Cost savings by 2018 from an alliance with General Motors Co. are projected to be 40% less than what the two companies originally expected. GM sold a 7% stake in PSA in December.