Nissan Stock Update: Renault Sells 5% Nissan Stake, Posts €1.5 Billion Loss
The move, which Renault said would reflect losses on its initial investment of up to 1.5 billion euros ($1.62 billion), would be the first in a series of share sales by Renault to reduce its stake in Nissan from about 43% to 15%. . .
To this end, we have placed 28.4% of the shares in a trust and plan to gradually sell these shares. Nissan, which has the right to propose preferred stock, plans to repurchase a 5% stake.
Renault and Nissan finalized the terms of their alliance restructuring at the end of July after months of negotiations aimed at a scaled-back but more practical and agile partnership. The two companies aim to hold a 15% mutual stake as part of the partnership agreement.
Renault said on Wednesday that it would sell shares worth about 765 million euros. The €1.5 billion capital loss will impact the company’s net results for the year, but not its operating income.
As of the end of 2022, Renault valued its 43.4% stake in Nissan on its books at 17.5 billion euros, and the current market value of Nissan as a whole is just over 15 billion euros.
Renault shares were down 2% in Paris by 0957 GMT. The sale of the Nissan stake, which Renault hopes will help restore its investment-grade rating, is part of a wider overhaul of the French company that also includes a market listing of its electric vehicle unit Ampere planned for next year.
Bernstein analysts said selling its 28% Nissan stake could increase Renault’s cash balance by up to 4.2 billion euros at current market prices and boost investor confidence that the company has enough cash to execute its strategy. said.
Nissan said in a separate statement that it would cancel the shares it purchased from Renault.
The Japanese automaker said the acquisition would cost about 119.95 billion yen ($824.85 million). It added that the transaction will be funded using its net cash position.
