France selling 4.7% stake in Renault: Government agency

Visitors walk past a Renault logo on the car maker's booth during the second media day of the 86th International Motor Show in Geneva, Switzerland, on March 2, 2016.
Visitors walk past a Renault logo on the car maker's booth during the second media day of the 86th International Motor Show in Geneva, Switzerland, on March 2, 2016.PHOTO: REUTERS

PARIS (AFP) - The French government on Thursday (Nov 2) launched the sale of a 4.73 per cent stake in automaker Renault, a state agency handling public assets said.

The sale will cut France's stake in Renault back to the 15.01 per cent level that it stood at two-and-a-half years ago, but still leaves it the automaker's biggest single shareholder.

In April 2015, the French government acquired the same 4.73 per cent stake that it is now selling to gain a blocking minority stake.

At the time, it said it would use its increased power in the company to push through measures designed to reward long-term investors, including with double voting rights.

This had now been achieved, said the Agence des Participations de l'Etat (APE), which handles state-owned shareholdings on behalf of the French government.

The stake sale, representing 14 million shares, will add much-needed cash to the coffers of the French government which is struggling to meet this year's deficit targets.

Based on Renault's closing share price on the Paris bourse on Thursday it is worth over 1.2 billion euros (S$1.9 billion).

The sale is likely to be well perceived by Renault's alliance partner Nissan which took a dim view of the French government hiking its stake in 2015.

Renault itself also opposed the higher stake as it aggravated long-simmering questions about whether Renault and Nissan should change their ownership stakes in each other.

Under an agreement struck in 1999 Renault owns about 43 per cent of Nissan, which holds about 15 per cent of the French's automaker's shares, but does not have voting rights.