The French government began the sale of 4.73 percent of carmaker Renault on Thursday, paring its holding back to the 15 percent that preceded a 2015 power struggle with Chief Executive Carlos Ghosn and removing a residual irritant in their relationship.
The APE state holdings agency said in a statement that it was placing 14 million Renault shares with investors in an accelerated book-building. Renault itself will take 10 percent of the shares for stock awards to current and former employees.
The sale may help smooth long-standing tensions between Ghosn, who also heads alliance partner Nissan as chairman, and French President Emmanuel Macron’s government.
Renault’s relations with its largest shareholder deteriorated in April 2015 when Macron, then economy minister, abruptly raised the state’s holding in a shareholder vote to almost 20 percent to secure double voting rights, a move opposed by Ghosn.
French Finance Minister Bruno Le Maire said in a statement the sale was worth about 1.2 billion euros ($1.40 billion). He said that represented a 55 million euro gain on when the shares were bought two years ago.
The share sale will trim the government’s stake to 15.01 percent – fulfilling its promise made in April 2015 that the state’s holding would fall back to its historic level.
That promise and expectations of the share sale have weighed on Renault’s stock price, which is up just 2.5 percent this year, underperforming the broader sector’s .SXAP 15.8 percent gain.
While drawing a line under the 2015 hostilities, the divestment does little to resolve a sense of strategic stalemate over the future shape of Renault, Nissan and their new alliance partner Mitsubishi.
Ghosn, who turns 64 shortly before his current Renault CEO contract expires next year, has said the carmakers are ready to forge closer capital ties but are prevented from doing so by the French government.
“The day the French state decides to get out, everything is open, and I can tell you it won’t take too much time,” he said in February.
Renault’s weak share performance had also, paradoxically, held back the promised sale by a government eager to avoid booking a loss on Macron’s earlier taxpayer-funded interventionism. Le Maire has acknowledged that the state was struggling to offload the holding.
Thursday’s sale appeared likely to achieve breakeven only when dividends are included in the calculation – helping to offset the cost of resale options purchased but left unexercised in 2015, as the power struggle deepened.