by Gilles Guillaume
PARIS, April 7 (Reuters) – Renault does not want to let the Russian case delay its plan to split between its electrical and thermal activities and its managing director intends to make an initial major internal update on the project called “Ampère” as soon as July, three sources familiar with the matter told Reuters.
The diamond group, which returned to its first profit in three years last year, had to suddenly revise its annual objectives downwards because of a provision of 2.3 billion euros – for Renault Groupe and RCI Banque – linked to the suspension of its activities in Russia in the wake of the war in Ukraine.
“Despite the Russian unknown, Luca de Meo wants to move fast on both entities,” one of the sources told Reuters.
Several working groups, supported by consultants, are actively working on the creation of two separate legal structures – codenamed “Ampere” for electrical assets and “Horse” (a nod to the traditional unit of horsepower- steam) for thermal and hybrid assets, added two of the sources.
Renault declined to comment.
The electrical entity, the most forward-looking in the current movement to reduce CO2 emissions, will be based in France and will host part of the engineering and factories, including the Cléon engine site (Seine-Maritime) , while the other entity, based abroad, could enter into one or more external partnerships, according to the sources.
To absorb the financial impact of Russia, so far the French carmaker’s second largest market, Renault has also asked internally for an additional effort on costs, the sources added, but without going so far as to stop ongoing projects.
The group, which unveiled its 100% electric entity project for the first time in February, plans to organize a “capital market day” in the fall for investors.
Several media outlets reported this week that management had told financial analysts that all options were on the table regarding its planned spin-off, including an IPO of the electrical part.
As of Wednesday, Renault shares had lost more than 14% of their value this year after falling around 27% in 2021.
The project of the two entities aims to improve the group’s visibility in an electric race dominated by Tesla, whose positioning as a “pure player” still appeals to investors.
The working groups on the split, which recalls the one already announced by Ford, must however still answer many questions, in particular social questions related to the positioning of the teams and sites within the two future entities, and the implications of the project on the structure and the current organization of the alliance with Nissan and Mitsubishi.
“The project will very soon be a subject of discussion with the unions, probably before the summer holidays,” said another source. (Gilles Guillaume, edited by Bertrand Boucey)