Renault aims to avoid renationalisation: chairman

The chairman of French automotives player Renault has said the company will aim to avoid being renationalised by the French government, according to Le Parisien.

Speaking to the paper, Jean-Dominique Senard said the firm may look for guarantees from the state in order to shore up its finances as the Covid-19 outbreak continues to take a toll on businesses worldwide, but said renationalising the business was not currently on the table.

Renault received a EUR 3.00 billion loan from the government in 2009, during the last global financial crisis, but Senard was quick to point out that even then, it never reached the point where renationalisation was necessary.

The state currently owns a stake of around 15.0 per cent in the car manufacturer.

Were it to acquire the remainder, this would involve the purchase of about 251.36 million shares, which can be valued at EUR 4.06 billion, based on Renault’s close of EUR 16.15 on 20th March, the last trading day prior to the report.

There have been four nationalisations of automobile manufacturers in part or as a whole announced worldwide on record, according to Zephyr, the M&A database published by Bureau van Dijk.

Of these, the most recent completed in July 2014, when Belarus-headquartered Yunison issued stock to the company’s government as part of a capital increase worth USD 1.46 million.

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This was preceded by the May 2014 announcement that Renault’s domestic competitor, Peugeot, was to carry out a new share issue worth USD 2.67 billion, with subscribers including the French government and Chinese peer DongFeng Motor Group.

The stock being sold via that deal accounted for a 36.8 per cent stake in the business.

Other automotive manufacturers to have been the targets of announced privatisations on record were Uzbekistan-headquartered Uzdaewoo Auto and China-based Yangzhou Yaxing Motor Coach.

Renault employs some 179,565 people across 39 countries worldwide.

The company sold 3.80 million vehicles in 2019 alone; its output is manufactured under five brands, namely Renault, Dacia, Alpine, Lada and Renault Samsung Motors.

It generated revenue of EUR 55.54 billion in 2019, compared to the EUR 57.42 billion recorded over the preceding 12 months.

Net income for the year stood at EUR 19.00 million, down from EUR 3.45 billion in 2018.

© Zephus Ltd

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