Russian Railways is reported to be mulling a bid for GEFCO, the transport and logistics arm of French auto manufacturer PSA Peugeot-Citroen.
The state-owned railway is willing to pay up to $1.25 billion for a 75-percent stake in GEFCO, which Peugeot plans to sell to reduce its debt, according to the Kommersant newspaper.
Russian Railways will discuss a possible bid at a meeting of its board of directors in early September, the paper said.
Peugeot, whose core car manufacturing unit lost 662 million euros [$835 million] in the first half of 2012, has publicly said it plans to open up the capital of GEFCO as part of an asset disposal program to stabilize its debt.
GEFCO booked an operating profit of $281 million in 2011 on revenue of $4.76 billion. It employs 10,300 people in 32 countries.
Peugeot, which is said to have asked Russian Railways if it was interested in bidding for GEFCO in May, is also talking four private equity investors – Platinum Equity, Gores Group, PAI and CVC/AXA Private Equity.
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