French Government Increases Its Stake In Renault
The French government wants to increase its stake in Renault despite opposition from the company’s Japanese alliance partner, Nissan, and its joint management headed by Carlos Ghosn.
The government has boosted its Renault stake to 19.74% from 15.01% in a move aimed at giving the state enough voting power to block Ghosn’s plan for Renault to opt out of the so-called Florange law introduced under French President Francois Hollande that doubles the voting rights of shares held for more than two years in companies.
Renault’s proposed opt-out will be decided at the company’s April 30 annual shareholder meeting. Ghosn and Nissan, which holds a 15% stake in Renault, oppose increased state influence in the French automaker. They want to keep the current one-share, one-vote capital structure.
Ghosn on April 16 demanded that the state back away from its plans, but the government’s near 20 percent holding is seen as likely to be enough to leave Renault’s management short of the two-thirds vote it needs. This is based on the usual level of turnout at Renault annual meetings and on the fact that Nissan’s 15 percent carries no voting rights. Ghosn has said that Nissan’s management would be discussing what to do about the issue this week. The Renault board last week issued a statement that said the alliance’s “survival and success” required the restoration of the previous balance between France and Nissan.
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