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It is the first tranche of a series of share sales by Renault to reduce its Nissan stake to 15% from around 43%. Picture: REUTERS
It is the first tranche of a series of share sales by Renault to reduce its Nissan stake to 15% from around 43%. Picture: REUTERS

Renault will sell a 5% stake in Nissan, the first stage of a planned disposal of its holding in the Japanese company in a wider rebalancing of the two carmakers’ long-standing alliance, Renault said on Tuesday.

The move, which Renault said will reflect a loss on its initial investment of up to €1.5bn, will be the first of a series of share sales to reduce its Nissan stake to 15% from about 43%. To do so, it has placed a 28.4% in a trust and is expected to sell that holding gradually.

At the end of July Renault and Nissan finalised the terms of a restructuring of their alliance after months of negotiations, aiming for a reduced, but more pragmatic and agile partnership.

The sale of shares worth about €765m will be carried out through a share buyback on Wednesday, Renault said. The €1.5bn capital loss will hit the firm’s net result for the year, but won’t affect operating income.

Renault shares were down 0.2% in early Paris trade after briefly rising at the market open.

Nissan said in a separate statement it had agreed to buy the shares that Renault is selling by using a right of first offer and that it will cancel those shares.

The Japanese automaker said the acquisition will cost about ¥119.95bn ($825.5m), and will be funded from its net cash position.

The move was “in line with Nissan’s commitment to enhancing shareholder returns and capital efficiency”, the comppay said. 

Reuters

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