PARIS :French carmaker Renault will report an extraordinary loss of about 9.5 billion euros ($11 billion) on its stake in Nissan Motor in the first half, it said on Tuesday, writing down its years-long investment in the Japanese firm that is battling slumping sales.
The move is a further loosening of ties between the companies after a two-decade-old partnership, with Renault gradually lowering its stake in Nissan and shifting largely to collaboration in certain manufacturing projects.
Renault currently owns 35.7 per cent of Nissan, with 17.05 per cent held directly and the rest through a trust.
Renault said in the future, any change in the value of the holding would be directly recognised in equity and assessed based on Nissan’s share price, with no hit to its net income nor to dividends it pays out.
It added that there would be no change to operational projects and collaboration between the two companies.
Shares in the French company slipped 1 per cent while Nissan fell 2.4 per cent on Tuesday to 341.8 yen ($2.39), trading well below 400 yen apiece, the price Renault valued the stock at to increase its stake in the Japanese automaker in 2002.
Renault’s 2024 universal registration document shows a carrying value of the Nissan investment of 1,549 yen per share.
Nissan has been hit harder than other automakers by the shift to electric vehicles, having never fully recovered from years of crisis sparked by the 2018 removal and arrest of former chairman Carlos Ghosn.
Facing declining sales and an ageing vehicle lineup, the carmaker reported a $4.5 billion net annual loss in the financial year that ended in March and has declined to give a forecast this year.
It has asked some suppliers to allow it to delay payments to free up short-term funds, Reuters reported on Monday.
Renault, which reports its first-half results on July 31, was one of few automakers not to issue a profit warning last year.
The company, which is currently seeking a new CEO, said on Tuesday that the one-off loss did not change its current guidance for the year.
($1 = 0.8483 euros)
($1 = 143.2900 yen)
