(News Bulletin 247) – The diamond group announced this Tuesday that it would sell 211 million Nissan shares as part of a share buyback program in the Japanese company.

Renault did not wait too long to launch its withdrawal from its historic ally Nissan. Since last November, the two car manufacturers have directly owned 15% of each other’s capital. Renault, which previously held 43.4% of its partner, housed the remaining 28.4% in a trust responsible for selling these shares gradually, with no time horizon.

This operation marked the rebalancing of relations between the two companies with a balance of power supposed to be more equitable, which constituted a long-standing request from the Japanese side.

For example, this new arrangement of participations results in the end of control of Nissan by Renault within the meaning of the French Commercial Code, which previously prevented Nissan from exercising the rights attached to its participation in the French group at a general meeting. . Another repercussion linked to this remodeling: the two companies put an end to their joint purchasing center.

There remains therefore a delicate operation to carry out: gradually selling the shares housed in the trust.

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An accounting loss of a maximum of 1.5 billion euros

For Renault, the task is hardly easy because these sales of Nissan shares on the market are synonymous with significant accounting losses, the Japanese group’s share price being well below the value of its shares in the results of the French group.

Renault had made this very clear in its last half-year report: as of June 30, the market valuation of this participation “was 59.2% lower than the asset value of Renault Group’s financial situation.”

With Nissan shares up 36% since the start of the year, Renault nevertheless judged that it was time to begin the process.

The diamond group announced this Tuesday that it would sell up to 211 million Nissan shares, or around 5% of the capital of the Japanese manufacturer, for a total sale value of 765 million euros.

These shares will be acquired by Nissan itself, as part of a share buyback program, which should help preserve the impact on the Nissan share price on the Tokyo Stock Exchange tomorrow (Wednesday) . The Japanese manufacturer clarified that it would cancel the acquired shares.

Accounting for Renault, Nissan shares have not recovered enough for the French company to escape the accounting loss. The diamond group will thus pass into its accounts a capital loss on disposal of up to 1.5 billion euros, which will weigh down its net income, but not its operating income or its cash. “This amount is a maximum that could be adjusted at the end of the year to reflect Nissan’s capital allocation strategy,” the company said in a statement.

On the Paris Stock Exchange, the operation penalizes the Renault share, which shows the biggest drop in the CAC 40 (-2%) at the start of the session this Tuesday, in a market up slightly (+0.3%).

The car manufacturer recalled that this sale was part of its capital allocation strategy. This policy has made it a priority for the group to return to an “investment grade” credit rating, i.e. in a non-speculative category.

Until this investment grade rating objective is achieved, the group will apply its dividend policy with a progressive increase in its distribution rate up to 35% of the group’s net income.