FRANCE: State moves to temporarily increase Renault stake to 20%
Renault shareholders will decide on any French State increase
Paris is proposing a temporary extension of its shareholding in Renault to almost 20% in a move to cost the French State US$1.3bn.
The surprise news comes despite Renault apparently having no urgent need of any cash injection, but appears rather to be caught up in a philosophical and strategic move by the left-wing French State, which says the operation will be for six months.
"This operation is perfectly in line with the new doctrine of the State as shareholder, having an active role in its portfolio: it consists of using the tools at the disposition of all investors; it has as a goal reinforcing the weight of the State shareholder in managing the business with the intention of protecting its long term interests...and particularly of those of Renault employee shareholders," noted a joint statement from the French Ministries of Finance and Economics.
The move - originating in last year's adoption of the Loi Florange - aims in the view of the French government to "reconquer the real economy" and allows those holding shares for at least two years to to be granted double voting rights.
The State maintains this is a way to encourage investors to keep hold of shares and to increase the influence of shareholders in the long term.
Paris also insists such double voting is already a reality in more than half of businesses on the French CAC 40 Stock Exchange.
Unless Renault shareholders at their annual general meeting in Paris on 30 April decide against, the French State will acquire 14m shares or 4.73% of the capital for a price between EUR814m and EUR1.23bn
"This move shows the will and capacity of the State to use all weapons available to investors to promote capitalism of progress," said Economy Minister, Emmanuel Macron, while his counterpart at the Finance Ministry, Michel Sapin noted: "Guarantor of long-term development of our economy, the State wishes to fully recognise its role as long-term investor."
A Renault spokeswoman in Paris told just-auto: "On this matter we do not have any comments."
France's Economy Ministry was not immediately available.