(Bloomberg) -- Renault SA is selling a second tranche of its remaining stake in Japanese partner Nissan Motor Co., which may help the French carmaker return to an investment grade rating.
The maker of Megane E-Tech cars plans to offload around 2.5% of its holding with proceeds expected of as much as €362 million ($391 million) for Renault, the manufacturer said Wednesday.
Renault last year started loosening ties with its long-time partner Nissan after their alliance had soured over the years. The French company sold an initial tranche of shares late last year, netting €765 million, part of a plan to lower its stake in Nissan to 15% from an initial 43%.
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The selldown of the holding in Nissan is giving Renault more financial firepower after the company decided to scrap the planned initial public offering of its electric-vehicle and software arm Ampere.
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Nissan plans to cancel all of the roughly 100 million shares following the transaction, the carmaker said Wednesday. The sale will result in a capital loss of as much as €450 million for Renault, set to impact group net income but not operating income.
The shares to be sold are part of the 24.6% of Nissan capital still held by a French trust, set up as part of the complex untangling of parts of the alliance. Since forging a new agreement, Renault has moved away from common structures with Nissan in favor of a new, project-by-project approach to working together, including in India.
Renault Chief Executive Officer Luca de Meo, Chairman Jean-Dominique Senard and Nissan CEO Makoto Uchida are holding an alliance operating board meeting in India this week and will hold a joint press briefing later Wednesday.
The two carmakers now have a direct cross-shareholding of 15% with lock-up and standstill obligations, allowing the alliance to continue on more equitable terms.
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