Shares in French auto group Renault rose sharply on Oct. 7 on news the company had sold most of its holding in Swedish truck maker Volvo AB for about 3.0 billion euros (US$4.1 billion), reducing its debt.
Renault said on Oct. 6 that it would sell 14.9% of Volvo AB to institutional shareholders, retaining a direct stake of 6.8%, together with 17.5% of the voting rights.
Renault has held the shares since 2001 as a result of the sale of its truck business to Volvo AB.
Chief executive Carlos Ghosn said the sale proceeds "will reinforce our balance sheet as we prepare for the launch next year of our new strategic plan."
Analysts said a reduction of debt would give the company much more freedom to act overall at a time when the auto industry has recovered from the worst of the global slump but faces a difficult future.
Consolidation appears to be the main theme and analysts at CM-CIC in Paris said the sale could be a prelude to an accord with General Motors, which has been radically restructured after its bankruptcy.
Copyright Agence France-Presse, 2010
