French government mulls investment in car group Peugeot

France’s government could participate in a capital hike at PSA Peugeot Citroen SA (EPA:UG) if needed, in an effort to help the carmaker limit its increasing losses, daily Liberation cited on Friday an unnamed government source as saying.

A state move to take a stake in Peugeot would be made only as a last resort plan, in case Peugeot could find no other way of dealing with the losses, the source told the paper, without giving any details.

The carmaker on Thursday cut the book value of its plants and other assets by 28%, adding EUR4.13bn (USD5.5bn) to its net loss for 2012.

The government said in October 2012 it was willing to provide state loan guarantees in the amount of EUR7bn to Peugeot’s financial unit Banque PSA Finance.

Peugeot did not wish to comment when contacted by Reuters.