Renault to sell 5% tranche of Nissan stake

French carmaker Renault will sell a tranche of around 5% of its stake in Japan’s Nissan as part of a wider rebalancing of the two companies’ long-standing alliance, Renault said in a statement on Tuesday.

The sale will be implemented as part of a share buyback program announced by Nissan, and is to be executed on Wednesday, Renault said.

Renault and Nissan finalised at the end of July the terms of a restructuring of their alliance after months of negotiations, aiming for a downsized, but more pragmatic and agile partnership.

Renault currently holds 28.4% in Nissan but it pledged earlier this year to significantly reduce its stake. After the deal is fully executed, the two carmakers will continue to hold mutual shareholdings of 15%.

The French company on Tuesday estimated that, based on the current Nissan share price, the first share disposal is worth 765 million euros ($824.29 million).

The sale would lead to a capital loss on disposal of up to 1.5 billion euros, which Renault would account for in its annual financial report outside operating income.

Nissan said in a separate statement that the move was “in line with Nissan’s commitment to enhancing shareholder returns and capital efficiency”.