Renault (RNO: Ba1 pos / BB+): HORSE JV With Geely

Renault have today announced the creation of a 50:50 JV with Geely.

The group expects to make joint revenues of EUR15b annual revenues from a production of 5m powertrains per year.

In Moody’s positive outlook piece on 9^th May they noted that IG would be possible in the next 12-18 months if:

• EBITDA Margin stable at 4.4%+
• Decrease adj Leverage to 2.75x (from 2.9x 2023)
• Sustain positive FCF

Renault are using the EUR 1.1b proceeds of its sale in Nissan to reduce debt and have a further EUR 2.92b available (888.6m shares). They will reduce their stake to 15%.

{https://media.renaultgroup.com/renault-group-and-geely-announce-the-creation-of-leading-powertrain-technology-company-horse-powertrain-limited/?lang=eng}