Nissan buys back shares from Renault

NISSAN is set to buy back five per cent of its own shares from Renault in a deal its French alliance partner said would result in a €494 million ($A797.9m) cash inflow for the company.

In a statement issued this week, struggling Renault said the deal would mark a further step towards cutting its debts and returning to an investment grade credit rating.

The move is understood to be part of a wider restructuring of the alliance between Nissan and Renault aimed at a downsized but more agile partnership with equal cross-shareholdings of 15 per cent.

“Following the resolution of the Board of Directors, Nissan announced the acquisition of its own shares from Renault and the cancellation of its own shares under the provision of the Companies Act,” said Nissan in a statement

“Nissan has received a notice from Renault offering to sell a part of Nissan which are held in a French trust, and has decided to acquire 195,473,600 shares, which correspond to all the Offered Shares except the shares less than one unit, by making use of its right of first offer as agreed with Renault under the New Alliance Agreement.

“Nissan has decided to cancel all the acquired shares. The transaction will be funded using Nissan’s net cash position.

“This decision is in line with Nissan’s commitment to enhancing shareholder returns and capital efficiency whilst maintaining the necessary financial resources to deliver Nissan’s business plans.”

The shares to be sold are part of the 22.73 per cent of Nissan’s capital held by a French trust (as a reminder, 28.4 per cent were initially transferred by Renault Group into this trust on November 8, 2023, pursuant to the New Alliance Agreement between Renault Group and Nissan).

Renault Group says the deal will not impact its operating income and have no impact on the dividend paid in 2025 on its 2024 results.

Further, it says any tax impact would be “non-significant”.