French car maker Renault SA (RNT.L,RNSDF.PK) on Thursday said that it has sold its remaining 6.5 percent stake in Swedish automaker AB Volvo (VOLVY.PK) for 12.78 billion Swedish kroner or about $1.92 billion. The move ends Renault's eleven-year run as a Volvo stake holder.
Renault said it successfully completed its institutional private placement of 138.60 million Series A shares of Volvo, its entire stake in the Series A shares, representing 17.2 percent of the voting rights, at a price of 92.25 kroner per share. The sale was through an accelerated book building and a private placement in Sweden and rest of the world.
Renault bought these shares in 2001, and initiated the exit on October 6, 2010. The company had initially sold 14.9 percent of Volvo's share capital and 3.8 percent of the voting rights..
The French car maker said it plans to use the funds raised through the stake sale to strengthen the financial stability, to reduce its net automotive debt and to strengthen its investments in Russia, China and notably in France that will represent around 40 percent of industrial investments of the Group in 2013. The French government owns 15 percent of Renault.
The company added that its strategic international investments mainly in Russia and China will constitute new opportunities for growth that will strengthen the car maker. It has noted on Wednesday that these investments are required to achieve competitiveness of its European plants and to foster the international expansion of Renault.
In a different deal on Wednesday, Renault-Nissan, a strategic alliance between Renault and Nissan Motor Co. (NSANY.PK), announced the formation of Russian joint venture Alliance Rostec Auto BV, with Russian Technologies State Corp. Under the deal terms, Renault-Nissan will invest 23 billion Russian rubles or $742 million, giving it a majority hold of 67.13 percent in the new JV by mid-2014. Upon close of the deal in 2014, Alliance Rostec Auto BV will acquire whole of AVTOVAZ, the Russian car maker that is currently owned by Troika Dialog Investment Ltd. Renault had earlier acquired 25 percent stake in AVTOVAZ.
Carlos Ghosn, Renault-Nissan chairman and CEO, said "The joint venture will help accelerate our Russian market offensive."
Off late, Renault has been concentrating on emerging markets as the struggling economic conditions in Europe had caused a 13.3 percent drop in its third-quarter revenues.
On the Paris stock exchange, shares of Renault are currently trading at 40.32 euros, up 0.69 euros or 1.74 percent on a volume of 1.38 million shares.
In Stockholm, Volvo shares are currently trading at 92.75 kroner, down 3.20 kroner or 3.34 percent on a volume of 18 million shares.
by RTT Staff Writer
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