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Renault sells stake in Volvo trucks

PARIS, FRANCE: Renault has sold its stake in Swedish truck manufacturer Volvo AB for €1.5bn to cut debt and make strategic investments.
The French car company, which was the leading shareholder with a 6.5% stake and 17.2% of Vovlo's voting rights, had earlier sold a 14.9% stake in the Volvo €3bn.

Renault acquired the stake by selling its truck unit to Volvo in 2001.

The French government, which owns 15.01% of Renault, said Wednesday (12 December) that 45% of the money raised from the latest sale of Volvo shares would be invested in France.

Renault's sales plunged by 18% in October. The company's debt has meanwhile dropped steadily from €8.0bn in 2008 to about €818m at the end of June 2012.

The news of the sale was well received with Renault shares gaining almost 1,2% on the Paris stock exchange.

The company has said it will also make strategic investments overseas, notably in Russia and China, and would focus on top-of-the-range cars and electric vehicles.

Renault-Nissan on Wednesday (12 December) signed an agreement with state conglomerate Russian Technologies to create a joint venture to allow the alliance to control Russia's Avtovaz.

By mid-2014, Renault-Nissan will hold 67.13% of the new joint venture which is to be called Alliance Rostec Auto BV and which will own 74.5% of Avtovaz, the maker of the iconic Russian Lada.

Last month, Renault and British manufacturer Caterham announced they would jointly produce a new line of sports cars that would incorporate "the DNA of the Alpine," an iconic Renault model.

Volvo AB is the world's second largest truck manufacturer behind Germany's Daimler. Volvo employs 100,000 people at factories in 20 countries. Last year Volvo AB posted a net profit €2bn on sales of €34bn.

Source: AFP via I-Net Bridge
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