Business

Renault sells most of its stake in truckmaker Volvo

Renault Fluence
Image caption Renault is due to launch a new strategic plan next year

French carmaker Renault has raised 3.1bn euros ($4.3bn; £2.7bn) by selling a large part of its stake in Swedish truckmaker Volvo.

Renault said the proceeds from the sale would help it to cut its debt to below 3bn euros from 4.6bn euros.

Markets welcomed the deal, with Renault shares up 6.4% early on Thursday, the strongest riser in the Cac 40 index.

Renault had previously said that its investment in Volvo was "not strategic".

'Major shareholder'

Volvo's share price has risen by nearly 60% since the beginning of the year as demand for trucks has started to recover.

In a statement, Renault said it had sold all its Volvo B shares, which represented 14.9% of the firm's share capital and 3.8% of the voting rights.

However, chief executive Carlos Ghosn said that Renault would remain a "major shareholder with 17.5% of voting rights".

"The funds raised from the placement will strengthen Renault's balance sheet, in preparation for the launch of our new strategic plan next year," he added.

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