(Bloomberg) — Renault SA is forging head with a plan to separate its electric-vehicle and combustion-engine car business with a possible initial public offering of its EV assets next year.
The carmaker is making progress with the split that was first floated in February with potential partners showing interest in the legacy operations, Chief Financial Officer Thierry Pieton said on a call with reporters.
The company is weighing options for carving up its business from “as simple as showing the numbers separately” to an initial public offering of its EV business that could take place in the second half of next year, Pieton said.
Alliance partner Nissan Motor Co. is working with Renault on the plans although the impact on the long-standing partnership isn’t clear, Pieton said. Separately, French prosecutors on Friday issued an international arrest warrant for former Renault leader Carlos Ghosn, who remains in Lebanon.
Renault detailed plans for a possible deep overhaul just as the company faces a crisis for its longstanding business in Russia, its second-biggest market. The company has halted operations at its Moscow plant and is examining options for its majority-owned AvtoVaz venture that makes the country’s top selling Lada brand. Talks with Russia over AvtoVaz are progressing, Pieton said Friday, without giving more details.
The shares declined by 0.5% in at 9:45 a.m. in Paris trading.
A move to split Renault could help raise funds for development of EVs and technology. While Renault’s first-quarter revenue fell less than expected on higher vehicle prices and a focus on more lucrative models, the company last month cut its annual forecast on the suspension of its business in Russia.
First-quarter revenue fell 2.7% to 9.75 billion euros ($10.6 billion), Renault said Friday, beating the 9.27 billion-euro estimate compiled by Bloomberg.
Other manufacturers’ earnings are also turning out less affected by worsening supply chain woes on the back of strong demand. Volvo AB Friday reported stronger-than-expected operating profit as the world’s second-biggest truckmaker raised prices. Swiss cement maker Holcim Ltd. raised its sales outlook for the year after strong demand in all regions.
Renault stuck with an estimate that chip supplies will shave production by around 300,000 this year, mainly in the first half, and said its order book is strong.
Global vehicle sales declined 17% over the three-month period, including a 34% plunge in Russia, the manufacturer’s second-biggest market, according to figures published earlier this week. The company’s shares have lost just over a quarter of their value since the war began with Renault is the most exposed automaker to Russia. Revenue from Russia fell 16% to 900 million euros, with AvtoVaz accounting for 527 million euros of the total.
The company, which said it’s ahead on its turnaround plan, will will hold a capital markets day in the fall.
(Updates with CFO comment in second, arrest warrant for Carlos Ghosn in third, other corporate earnings in ninth paragraph)
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