Report – Renault board meeting triggered by French state holding increase image

The French automaker has called an emergency board reunion because the French government has moved to increase its share package to ensure tighter control over the company.

The board meeting has been reported by a company insider that has knowledge of the automaker’s plans, with the Thursday afternoon board reunion called to address “shareholding changes”, according to the source, which declined to reveal his identity because of the sensitivity of the subject. The French government recently announced it had moved to amass more shares in Renault to lift its influence over the company. The state officials claimed the government wanted to ensure that a recent proposal to veto the so-called Florange law would not pass – the latter gives long-time shareholders of French companies double voting rights. Analysts and industry experts also viewed the move as a direct challenge to chief executive officer Carlos Ghosn’s strategy – a long time leader of both Renault and alliance partner, Japan’s Nissan.

The French state on April 8 revealed it has increased its Renault stake to 19.7 percent from the previous 15 percent with the intention to secure the necessary voting rights to veto a Ghosn-proposed shareholder directive to maintain the one vote/one share strategy. Blocking the April 30 shareholder meeting opt-out resolution is now becoming a threat to Renault’s alliance with its 43.4 percent-owned partner – Japan’s Nissan, albeit a larger automaker, is deemed under Renault control even as it has a 15 percent reciprocal stake, which actually doesn’t give any voting rights.

Via Reuters