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by Gilles Guillaume
PARIS (Reuters) – Renault announced on Wednesday that it was launching a second wave of sales of Nissan shares as part of the overhaul of their alliance, involving 7% of the capital of the Japanese group which will acquire part of it.
As part of the capital rebalancing agreements of the Franco-Japanese partnership founded around twenty years earlier, Renault placed 28.4% of its stake in its Japanese partner in a trust, which it intends to monetize in particular to help to find the investment category in the eyes of the rating agencies.
Renault announced in December an initial sale of 5% of Nissan for a cash flow of 764 million euros and a loss on sale of around one billion euros.
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“Renault Group (expressed) its intention to sell 280,690,000 Nissan shares (representing approximately 7% of Nissan’s capital),” the French automaker announced Wednesday in a press release.
“In accordance with the New Alliance Agreement, Renault Group has the option to sell the remaining 180,447,100 shares that have not been repurchased by Nissan, over a period of 180 days to Nissan or third parties.”
As part of this second wave, the Japanese group has already agreed to buy back around 2.5% of the capital. According to Renault, Nissan also indicated its decision to cancel the acquired shares.
Asked about its intentions regarding the remaining 4.5%, a Nissan spokesperson declined to comment. “We have nothing to add to the figure we reported to the Tokyo Stock Exchange today,” he said.
During the next six months, Renault can now sell the remaining shares to its Japanese partner, to an investor proposed by Nissan or even on the market, indicated a source close to the matter. “But the sale will follow a coordinated process in accordance with the new alliance agreements,” she added.
The sale of the 2.5% represents for Renault a positive cash flow of up to 362 million euros and a capital loss on the sale of up to 450 million euros. After the transaction, approximately 22.8% of Nissan’s capital remains in the trust.
The capital rebalancing of the alliance formalized last year planned to reduce Renault’s stake in Nissan to 15%, the same level as that of Nissan in Renault.
(Reporting by Gilles Guillaume, with Daniel Leussink in Tokyo, editing by Kate Entringer and Zhifan Liu)
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