Nissan in talks to buy France’s Renault stake in merger prelude

Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, in a file photo attending a news conference to unveil Renault's mid-term strategic plan in Paris, France, October 6, 2017. (REUTERS)
Updated 07 March 2018
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Nissan in talks to buy France’s Renault stake in merger prelude

LONDON/FRANKFURT/GENEVA: Renault and alliance partner Nissan are discussing plans for a closer tie-up in which the Japanese carmaker would acquire the bulk of the French state’s 15 percent Renault holding, people close to the matter told Reuters.
The carmakers are in talks with government officials over proposals by Renault-Nissan boss Carlos Ghosn that would see Paris give up influence at Renault and the French carmaker relinquish control over Nissan, according to three sources.
But any deal still faces significant hurdles — not least its extreme political sensitivity in France — and has yet to win government approval, they said. To do so, it must balance French and Japanese interests, avoiding the appearance of a takeover.
“Any discussion about a share transaction involving Renault, Nissan or the French state is pure speculation,” Renault-Nissan spokesman Jonathan Adashek said. The alliance “has no plans to change the cross-shareholding ratio of its member companies,” he added.
French government officials did not return calls and messages seeking comment.
Renault is being advised by BNP Paribas and Nissan by Nomura on the planned stake sale, which would happen either as part of a broader Renault-Nissan combination or as a “stepping stone” on the way to one, the sources said. The banks did not respond to requests for comment.
Ghosn has also proposed an interim structure that would see management of Renault, Nissan and Mitsubishi Motors overseen by a Dutch foundation as a prelude to their integration as a global automotive group based in Amsterdam, sources said.
Renault shares rose sharply on the news, and were 8.2 percent higher at 96.73 euros as of 1604 GMT.
The Renault-Nissan alliance, underpinned by cross-shareholdings, has wrestled intermittently since its 1999 inception with plans for full mergers that have foundered on objections from France, Renault’s biggest shareholder.
But with Ghosn, the alliance’s main architect, now beginning his final term as Renault CEO, the government has been pressing for a tie-up to secure the future of Renault-Nissan, the world’s largest carmaking group by sales last year.
President Emmanuel Macron’s government recently told Ghosn’s representatives it would be ready to exit or sell down its Renault holding as part of a merger deal that secured French interests, according to multiple sources close to the talks.
Renault holds 43.4 percent of Nissan but agreed to limit formal control of its larger partner in a 2015 shareholder pact that defused a boardroom standoff with the French government. Nissan currently owns a 34 percent controlling stake in Mitsubishi and 15 percent of Renault, but no voting rights.
Under Tokyo market rules, Renault would lose all voting rights on its Nissan holding if the Japanese carmaker raised its Renault stake to 25 percent or more.
Any move by France to sell most or all of its Renault stake could prove politically risky for Macron, already under fire for letting national champions such as TGV train maker Alstom fall into foreign hands.
Beyond its dilution and loss of influence, France remains concerned about the impact on technology centers, industrial jobs and tax revenues from a combined group headquartered elsewhere, the sources said.
To win acceptance, they added, the deal would need to include powerful concessions and guarantees to France, in areas such as jobs and investment, board representation and possible “golden share” veto rights over major strategic decisions.


Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018
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Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.