Renault will propose to Nissan Motor Co a plan to create a joint holding company that will give both firms equity as the French automaker wants further integration with its Japanese partner, the newspaper Nikkei reported on Friday.
According to the proposal, the two companies will nominate almost equal number of directors in the new company in which ordinary shares in Nissan and Renault will be transferred in a balanced way, the newspaper said without quoting sources.
This will effectively separate the shares held by the French government in Renault from around 7 to 8 percent, from the current 15 percent, he added. The new company will be based in a third country, like Singapore.
Renault plans to present Nissan's proposal soon, Nikei said, after changing my previous coupling idea that Nissan rejected on April 12th.
Nissan declined to comment on this issue.
The proposal report comes as an outlook for the Alliance – one of the world's top partner partners – blurred by the November arrest of its chief architect, Carlos Gosn, for financial misconduct.
It also comes in when Nissan's financial performance moves in a few years focusing on the volume of sales over the construction of its brand, especially in the United States, its largest market.
Earlier this week, the Japanese carmaker cut its profit forecast for the year just finished to its lowest in nearly a decade, citing weakness in its operations in the United States.
Renault has been competing for a closer merger with Nissan for years, which saved it from bankruptcy two decades ago. Ghosn worked to achieve deeper integration before his arrest for financial costs of misconduct in November last year.
While automakers have consolidated many of their operations over the past decade, including purchases and production, many Nissan executives have opposed the overall merger with Renault.
Instead, Nissan stands for an equal footing with Renault, which owns 43 percent of its larger partner. Nissan has 15 percent stake in Renault.
It is unclear whether Renault will hold the voices of the new company, as did Renault-Nissan BV, a strategic management company with the two companies overseeing partnership activities.
That company was disbanded last month after an internal investigation by Nissan after the Gons arrest showed that the company might have been involved in a financial offense by the former president.
Nissan is a partner with Mitsubishi Motors Corp. <7211.T>, which holds 34 percent of the shares, will remain unchanged under the new proposal, Nikei said.
Renault said the first quarter revenue fell by 4.8 percent, exaggerated by the failure of currencies and by the withdrawal of a French carmaker from Iran last year.
Revenues fell to 12.527 billion euros ($ 13.95 billion) in January-March from $ 13.155 billion earlier, the company said on Friday. On a similar basis, with the exception of currency effects, the fall would be 2.7 percent.
Renault's global shipments fell 5.6 percent to 908,348 vehicles in the quarter. The company's pullout in Iran resulted in a 31% drop in sales in Africa, the Middle East and India, while its sales volume in Europe grew by 2%.
The car maker confirmed the lead in 2019, including higher revenues, positive motor cash flow and the group operating margin of up to 6 percent.