PSA, Mitsubishi Line Up Loans to Expand Russia Venture

Mitsubishi Motor Corp. and PSA Peugeot Citroen plan to borrow €320 million ($407 million) to triple annual capacity at their joint venture in Kaluga, Russia, by 40,000 vehicles to 125,000 units, The Nikkei reports.

The European Bank for Reconstruction and Development has agreed to a seven-year loan of €170 million, according to the newspaper, which doesn't cite sources. It says French bank Societe Generale and other European financial institutions will lend the partners an additional €150 million.

The Nikkei speculates that European bankers are making the loans to bolster PSA and its strategy to expand operations and sales in Russia. PSA owns 70% of the two-year-old Kaluga venture. MMC holds the balance.