PSA: No Plan to Sell Stake in Faurecia

PSA Peugeot Citroen denies an analyst's report that it may sell its 57.4% stake in parts supplier Faurecia SA to raise badly needed operating cash.

Paris-based CM-CIC Securities estimates such a sale would raise between $1.6 billion and $2 billion for PSA. Last summer the carmaker said it was burning through about $262 million in cash per month as it struggled with a 17% drop in sales last year.

But PSA says it will continue to pursue a cost-cutting strategy that includes layoffs, plant closures and the sale of non-core assets.

Divesting Faurecia would enable PSA to shed the partsmaker's $2.1 billion in debt. But it also would cut off a key source of profit. Credit Suisse figures Faurecia contributed almost $2.4 billion in profits to PSA between 2006 and 2012 a period in which the company's carmaking operations lost nearly $1.6 billion.