Nissan shares slide – report

NISSAN shares have slumped five per cent following news that the Japanese company’s top shareholder, Renault SA, may consider lowering its stake in the firm.

As reported by GoAutoNews Premium yesterday, the French manufacturer has proposed to offload its 43.4 per cent stake in Nissan to fund a separate EV business and overcome its exit from Russian automaker AvtoVAZ.

Renault also said it was considering listing the company publicly in the second half of 2023.

According to a report published by Reuters, Nissan shares fell to 509.8 ($A5.51) on the news, marking the Japanese firm’s largest one-day decline in share value since early March and underperforming an almost two per cent drop in the Nikkei index.

Renault CFO Thierry Pieton said any such plans would be subject to approval from its alliance partner, Nissan, adding that the Japanese manufacturer was being kept “in the loop” as Renault considered its options.

In January, and just 18 months after announcing that Mitsubishi would join the alliance, Renault-Nissan-Mitsubishi detailed a five-year and €23 billion ($A36.6 billion) investment plan that aimed to accelerate and shape the group’s electric vehicle future.

But Reuters says the unequal relationship between the French and Japanese companies is a source of ongoing friction in Japan, with Nissan’s 15 per cent non-voting stake in Renault considered little more than a gesture; Renault effectively controls the alliance.

According to Automotive News, Renault’s share in Nissan is estimated to be valued at $US6.7 billion ($A10.5b). The publication suggests Renault may not sell all its stake in the Japanese firm, instead opting to reduce its interest to 15 per cent – or closer to that of Nissan’s ownership of Renault – which would yield it approximately $US5 billion ($A7b.

Such a plan could see Nissan buy back some or all its 1.83 billion shares or see the stake purchased by an independent buyer.

Despite the most recent development, Automotive News suggests Nissan is in a better position than a year ago to buy back its shares, should Renault decide to sell them. Nissan has $US15.6 billion ($A21.6b) in cash and equivalents on hand, and fiscal year operating profit is on track to be positive for the first time since 2019.

Nissan COO and a former Renault Group executive, Ashwani Gupta, is expected to have meetings this week in Paris with Renault CEO Luca de Meo ahead of a broader meeting between Renault and Nissan’s executives in Tokyo next month.