Peugeot set to raise €800 million in Russian deal

Peugeot set to raise €800 million in Russian deal
PSA Peugeot Citroen
French carmaker PSA Peugeot Citroen said on Thursday it was in negotiations to sell 75% of its logistics subsidiary Gefco to Russian railway firm RZD for €800 million ($1.04 billion).

While RZD would effectively get control of Gefco under the deal, the head office of the logistics group is expected to remain in France and the company is expected to retain its current management team, including Luc Nadal as president, Peugeot said.

The deal would help Gefco "further enhance its geographic expansion strategy in China, India and Latin America, but also accelerate its growth in Eastern and Central Europe, particularly in Russia," added the carmaker.

The divestment is part of a wider programme of assets sale, as the struggling French carmaker is trying to raise €1.5 billion to improve its
financial situation.

The group has also undertaken cost-cutting measures, including slashing 8,000 jobs in France and closing a factory near Paris, to consternation in its home country.

Gefco employs 9,400 people worldwide, including about half in France, and posted €3.78 billion in sales for 2011.

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