Renault is set to sell a 5% stake back to Nissan as the two car manufacturers make the first moves to drastically alter their alliance.
The French car manufacturer is selling 211 million Nissan shares at a price of ¥568.5 ($3.91), valuing the sale at up to €765 million ($825 million). Renault will be hit with a €1.5 billion ($1.61 billion) capital loss from the sale but says this will not impact its operating income.
This sale represents just the first tranche of a series of share sales that Renault will make. As part of its new alliance agreement with Nissan, it will reduce its stake in the Japanese company from around 43% to 15%. While it is not yet clear when the remaining shares will be sold, analysts from Bernstein tell Reuters that Nissan selling 28% of its stake could improve its cash balance by as much as €4.2 billion ($4.5 billion) at current market prices.
Nissan will cancel the shares it is buying back from Renault and acquire them for an estimated ¥119.95 billion ($824 million).
Read: Nissan To Invest $663 Million In Renault’s EV Unit As The Two Companies Finalize New Alliance
Through the new alliance, Renault and Nissan will both hold a 15% stake in each other. Nissan’s 15% stake in Renault will also be converted from a non-voting stake to one with voting rights.
In exchange for reducing its stake in Nissan, Renault will receive an investment of up to €600 million ($663 million) in its Ampere EV division from its Japanese counterpart. Renault chief executive Luca de Meo wants to see Ampere go public sometime between March and May next year. It had hoped to see Ampere go public before the end of this year and was aiming for a market capitalization of around €10 billion ($11 billion) but these plans were delayed.
