Renault and strategic partner Nissan will combine forces to raise their profiles on international financial markets and push them ahead of Volkswagen in the global stakes.
Renault and strategic partner Nissan will combine forces to raise their profiles on international financial markets and push them ahead of Volkswagen in the global stakes.
In the last complete global vehicle sales report from 2002, Nissan was placed ninth and Renault tenth. Their combined 5,1 million sales would reposition them at number 4 behind General Motors, Ford and Toyota, reported.
Renault’s 2003 annual report is scheduled for release in a few weeks and will include a “simplified balance sheet” joining the partners’ sales and operating profits Renault chief financial officer Thierry Moulonguet said.
“This is to give more weight to the alliance,” Moulonguet said.
Current ratings of the two companies put their debt at medium-grade, meaning they are subject to moderate credit risk. Analysts have said that a combined balance sheet may convince credit rating agencies to upgrade their view of the creditworthiness of Renault and Nissan.
Since it took over a near-bankrupt Nissan in 1999, Renault has turned the Japanese company into the world’s most profitable volume carmaker.
Nissan has been generating enough profit to repay its debt and pay a generous dividend to Renault for its 44,4 per cent stake. Renault, in turn, reduced its debt to 13 per cent of equity by the end of 2003 from a ratio of about 50 per cent after it took over Nissan. Renault says it intends to repay the debt in full within three years.
