French government raises stake in Renault to 19.73% to sustain voting rights

Article by Christian A., on April 9, 2015

France will spend as much as 1.23 billion euros ($1.3 billion) to temporarily increase its stake in Renault in order to keep its influence on the auto company. The French government has been purchasing shares in the automaker to raise its stake from 15% to 19.73%. In 2014, a revision was made in French law that means that double voting rights are given to shares in publicly traded companies that have been held for over two years.

However, shareholders could adopt resolutions in annual general meetings to preserve the one-share, one-vote system. According to the industry minister, this resolution was suggested for Renault's annual meeting on April 30. The government is undertaking measures to guarantee that it doesn’t pass.

In a statement, Economy Minister Emmanuel Macron said that this deal is proof of the intention of the State to exploit “all the arms” that investors can make use of in order to support “a progressive, long-term kind of capitalism that supports workers and helps companies grow.”

He also said that the government aims to sell the newly acquired shares after the vote and has gotten options to maintain the stock’s value. He added that the move isn’t meant to increase the government’s stake in Renault in the long term.

The ministry said that what they’re doing complies with the new doctrine of state shareholdings, which refers to the active management of the portfolio. He shared that the goal is to “protect the state’s weight in the governance of the company and to defend its long-term interests.”

Last Tuesday, the French treasury purchased 9.6 million Renault shares on the market and has given a bank a mandate to acquire 4.4 million more. This move is expected to cost anywhere from 814 million euros to 1.23 billion euros.

On Tuesday, shares in Renault closed up 0.71% at 85.26 euros. In France, double-voting rights are quite common. Meanwhile, countries like the United States and Britain considers the one-share, one-vote principle as the foundation of good corporate governance.

Topics: renault, france

If you liked the article, share on:

Comments

Recommended

In September 27, 2016, Porsche initially filed for a patent that is the “Unique Active Rear Diffuser”. And earlier this week, on April 27, 2017, the United States Patent and...
by - April 29, 2017
The Insurance Institute for Highway Safety (IIHS) has given its Top Safety Pick+ award to the redesigned version of the 2017 Kia Cadenza. This was a result of excellent a...
by - April 29, 2017
It’s pretty neat if you possess something of an extraordinary breed like, say, the Pagani Huayra. There are after all just a total of 100 units ever been built by...
by - April 28, 2017
If you’ve ever visited an arcade, chances are you have already seen a Logitech G920 wheel. If that doesn’t ring a bell, it’s the steering wheel that you use when...
by - April 28, 2017
Toyota Motor Corporation disclosed that it will be bringing two of its Mirai fuel cell vehicles to China by October of this year. Tests will then be conducted on these...
by - April 28, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries