Feb. 14 (Bloomberg) -- PSA Peugeot Citroen is close to a deal for a joint venture with Banco Santander SA to strengthen the financing of the automaker’s lending arm, two people familiar with the matter said.
Santander would pay cash for a portfolio of loans from Banque PSA Finance, and the two would create a sales financing network together, said one of the people, who asked not to be identified because the talks are private. The companies aim to announce the agreement next week, the people said.
The banking deal would come on top of a 3 billion-euro ($4.11 billion) stock-sale plan that Peugeot is negotiating with France and Dongfeng Motor Corp., the automaker’s current partner in China. The French manufacturer said last week that its board aims to vote on the capital increase on Feb. 18.
Europe’s second-largest automaker has burned through more than 4 billion euros in cash in the last two years as deliveries fell amid slumping demand in its home region. The new funding would help Peugeot pay for the development of new models and expand in growing markets such as China.
Representatives for Peugeot and Santander declined to comment on the possible deal. Reuters earlier reported on the agreement.
--Editors: Chad Thomas, Sara Marley