Nissan Motor seeking to review capital relationship with Renault - report (translated)
21 NOV 2018
Nissan Motor Co., Ltd [TYO:7201] is considering requesting a review of its capital relationship with Renault [EPA:RNO], the Fuji Sankei Business i reported.
The Japanese-language report cited an unnamed Nissan executive who said that revising the capital tie-up between the two companies is a necessary condition for the alliance to continue.
Currently, Renault holds a 43% stake in Nissan, while Nissan holds a 15% stake in Renault, the report said. Furthermore, Nissan’s stake in Renault does not include voting rights, a relationship that a Nissan executive has characterized as extremely unfair and distorted. Taking advantage of the opportunity provided by the arrest of Nissan Chairman Carlos Ghosn for alleged serious financial misconduct, Nissan is seeking to change the capital relationship with Renault, the report said. Previously, decisions on changing the capital relationship would be up to Ghosn, the report said, adding that it was difficult for other executives at Nissan to rectify the situation.
However, it isn’t clear whether Renault will respond to a request for changes by Nissan, the report said. In particular, it is highly unlikely that Renault would accept any reductions in its stake ratio if connected to a reduction in dividend payouts, the report said.
Moreover, the report continued, the French government, a Renault shareholder, is focused on promoting the competitiveness of its domestic industries, and is seen to be trying to exercise its influence on Nissan through Renault, so there are likely to be complications in review discussions.
Nissan Motor has a market capitalization of JPY 4.027trn (USD 35.6bn).
The original article appeared in print; pg. 1.