DONGFENG Motor Group Co., currently in talks to buy a stake in PSA Peugeot Citroen, asked yesterday for a trading halt of its Hong Kong-listed shares pending an announcement concerning “inside information.”

    Dongfeng, which already has a joint venture with Peugeot in China, did not give further details and company spokesman Zhou Mi said he was not aware of the reason behind the suspension.

    The halt comes after sources in France said Friday that Peugeot negotiators and French government officials will be in China this week for what they hope will be a final round of negotiations on the tie-up with the China’s second-biggest automaker.

    The sources said the proposed deal that would see the Chinese carmaker and the French Government take matching stakes in the Paris-based company through a 3-billion-euro (US$4.09 billion) share issue.

    The final push for an agreement, due to be presented to the French carmaker’s board Feb. 18, follows public discord among members of the founding Peugeot family and protests from minority shareholders over the planned capital increase.

    It was immediately not clear whether the final agreement, if reached, would be between Peugeot and Dongfeng or its unlisted, State-owned parent, Dongfeng Motor Corp.

    Crippled by Europe’s six-year market slump, Peugeot has said it needs fresh funding to survive in the medium term. The company’s financing arm is already being kept afloat by a 7-billion-euro loan guarantee from the French state.

    Zhang Yuguang, China-based spokesman for Peugeot, said he was not aware of a trip to China by company negotiators.

    Peugeot said in January that it is targeting a formal deal with Dongfeng and the French Government by the time the company reports full-year earnings Feb. 19. The company hasn’t specified the size of the potential stakes Dongfeng and the French state may buy.

    (SD-Agencies)