(Boursier.com) — Fitch Ratings advises that the new roadmap of the Renault-Nissan-Mitsubishi alliance has no imminent impact on the ‘BB’ rating of Renault. “Future rating actions will depend on Renault’s capital allocation strategy following Ampère’s IPO and the contribution of announced operational investments to the group’s profitability, which we will review as we receive more details”, details the rating agency.
Under the plan, Nissan will buy a 15% stake in Ampere, Renault’s software and electric vehicle company, along with Mitsubishi and Qualcomm, while Groupe Renault will retain control. Fitch believes this leaves room to free up 20% of Ampere’s shares. “We believe that Nissan-Mitsubishi’s investment in Ampere will be made concurrently with the IPO in the second half of 2023”, says Fitch, who considers that: “The valuation and potential allocation of capital are not clear now”. Fitch nevertheless believes that “Ampere’s financing and investment needs will be largely covered by the capital raised”.
Groupe Renault will transfer 28.4% of its Nissan shares to a French trust through which it will retain its economic rights, which include the payment of dividends and sales proceeds. Groupe Renault has not specified when or if it will seek to sell these shares. Fitch believes that “Ampere’s IPO already gives Renault balance sheet support and headroom, and that management will not seek to sell these shares in a hurry. Nevertheless, they add to the value created by the new roadmap for alliances and the structure of Groupe Renault”.
The new roadmap also defines joint operational investment plans in Latin America, India and Europe, covering multiple technologies and segments. The alliance believes there will be significant cost sharing and synergies through the sharing of platforms, technologies and operational support, such as leveraging each partner’s geographic strengths. Fitch does not have details on the potential impact of the joint operational roadmap on profitability and expects it to be more visible after its 4-year forecast period.
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