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Renault summons board in response to French stake hike - source

Published 15/04/2015, 20:07
© Reuters. The logo of Renault is displayed from the ceiling of an exhibition hall during the Brussels International Auto Show
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By Gilles Guillaume

PARIS (Reuters) - Renault (PA:RENA) will hold an emergency board meeting on Thursday in response to French government moves to tighten its grip on the carmaker and its alliance with Nissan (T:7201), a company source with knowledge of the matter said.

The afternoon board session has been scheduled to discuss "shareholding changes", the source said, after France raised its Renault stake to bolster its influence over the company in a challenge to Chief Executive Carlos Ghosn.

Neither Renault nor the French government responded to calls and messages seeking comment on Wednesday evening.

The French state unveiled moves on April 8 to increase its Renault holding to 19.7 percent from 15 percent, and to block a shareholder resolution proposed by Ghosn that would maintain one vote per share in the company.

Legislation introduced under Socialist President Francois Hollande doubles the voting rights of longer-term shareholders in companies that do not explicitly opt out of the so-called Florange law by a two-thirds majority vote.

By blocking the opt-out at the April 30 shareholder meeting, the government aims to increase its own clout at the risk of destabilising Renault's alliance with its 43.4 percent-owned partner, Nissan.

Nissan holds a reciprocal 15 percent of Renault but no voting rights - a sore point in their 16-year alliance - because the larger Japanese group is deemed to be under Renault control.

The source did not say what options would be considered at the board meeting.

© Reuters. The logo of Renault is displayed from the ceiling of an exhibition hall during the Brussels International Auto Show

Measures to rebalance the alliance have been considered in the past, according to Renault and Nissan insiders - including a Nissan capital increase or a reduction of Renault's stake. Either could renew Nissan's voting rights in Renault.

(Writing and additional reporting by Laurence Frost; Editing by Andrew Callus)

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