France Reduces Stake In Renault

By Agence France-Presse The French government, taking advantage of improvement in the stock market, on July 28 sold 8.5% of the auto group Renault SA for about 1.2 billion euros (US$1.36 billion) amid controversy over strained public finances. The sale is the latest step in the French government's gradual withdrawal from Renault -- long an icon of the state's important role in French capitalism and more recently revived with help from its Japanese partner Nissan Motor Co. Ltd. The sale comes after Renault's publication last week of a 31.6% jump in net profit in the first half of the year driven largely by a contribution from Nissan, of which Renault owns 44.4%. But the move, which lowers the state's stake to 15% of Renault's capital, also marks the return of the cash-strapped French government's plans to sell some state holdings, which had been put on ice amid weakness in global stock markets. The finance ministry said investors had snapped up the shares. "The success of this operation demonstrates the confidence of investors in Renault's development strategy, and, in particular, in the strength of the industrial alliance between Renault and Nissan," the ministry said in a statement. It said the sale of 24.2 million shares went for 49.15 euros per share, at the top of the range they were offered, raising about 1.2 billion euros. Renault shares ended last week at 49.80 euros, having risen following publication of six-month results, and have risen 19% since the middle of June. The state said it would sell another 3 million of its Renault shares to current and former Renault employees. Following these two stake sales, the state would hold roughly 15% of Renault's share capital, representing 18.5% of voting rights. Copyright Agence France-Presse, 2003