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:

Pin It

Comments

Recommended

Has Toyota started the production of a new electric supercharger? Well, a patent that was recently published indicated that they might have. And this electric supercharger looks more durable and...
by - March 27, 2017
The Tesla Model S has finally arrived in South Korean soil and is now available for test drive. But, there’s a catch. You’ll have to wait several months if you...
by - March 27, 2017
Sorry to say this to the Sport Quattro Concept fanatics. If you guys have been hoping for the production of this iconic concept to begin, prepare for your dreams to...
by - March 27, 2017
South Korean car company SsangYong recently revealed sketches of their upcoming SUV. We’re not always impressed by Korean car designs, but this one looks quite promising. Yup, it is the...
by - March 26, 2017
Twenty-eight years after the company was first launched by Toyota, which was initially targeted to the United States market only, Lexus has already made its way to over 70 countries....
by - March 26, 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