February 8, 2013 / 6:52 AM / in 5 years

France mulls taking stake in Peugeot - paper

A Peugeot logo is seen on a displayed car on media day at the Paris Mondial de l'Automobile September 27, 2012.Jacky Naegelen

PARIS (Reuters) - The French state is examining the possibility of taking a stake in struggling carmaker PSA Peugeot Citroen (PEUP.PA), French daily Liberation reported on Friday, citing unnamed sources.

The newspaper said this was being treated as a "last-resort" plan in case Peugeot found itself unable to stem widening losses. It cited one government source as saying the state could take part in a capital increase if it became necessary.

Peugeot declined to comment.

On Thursday, the company slashed the book value of its plants and other automotive assets by 28 percent, in a writedown adding 4.13 billion euros to its 2012 net loss to reflect Europe's worsening market outlook.

Last October, the French state said it would offer 7 billion euros of state loan guarantees to the company's financial arm, Banque PSA Finance.

Reporting by Alice Cannet; Editing by Lionel Laurent

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