Updated January 30th, 2024 at 11:13 IST
Renault discards IPO for EV vertical Ampere
Groupe Renault said it would continue to fund the development of Ampere until it reaches break-even in 2025
- 3 min read
IPO Update: French automotive manufacturer Renault has dropped plans to list its electric vehicle (EV) business Ampere due to sluggish stock market conditions.
In September, Luca de Meo, CEO of Groupe Renault and Ampere, said the IPO could be worth up to 10 billion euros.
The demand for e-vehicles in Europe has weakened and the region's carmakers continue to face stiff competition from Chinese rivals.
The IPO was focused on extracting more value from the business by giving Ampere higher visibility and separating it from the combustion engine business, known as Horse.
Renault stressed upon it had enough cash to do without the IPO.
"Today, we took a pragmatic decision. We are all focused on executing our strategy and building our track record to create value for all our stakeholders," said de Meo.
Investment in EV
Groupe Renault said it would continue to fund the development of Ampere until it reaches break-even in 2025, according to an official statement.
"Renault Group strategic plan, Renaulution, is self-funded and the results which will be released for 2023 confirm the group’s ability to generate sustainable cash flow to finance its future (including Ampere development)," it said.
"Considering both current equity market conditions and stronger cash generation, Renault Group has decided to cancel the Ampere IPO process," it added.
In 2022, the company announced its intention to proceed with an IPO for Ampere in the first half of 2024 but said in late 2023 that it would not go ahead if the valuation was too low, the company said.
Last year in December, Renault's longstanding alliance partners Nissan and Mitsubishi confirmed plans to invest in Ampere.
Renault on Monday said that these companies were interested in investing in Ampere even if the company did not proceed with an IPO.
Chip maker Qualcomm QCOM.O is also expected to invest in Ampere, however, its investment hinged on the IPO taking place.
"We'll have to discuss with them if they want to participate in some other shape or form, or if we keep it the way it is," Renault's CFO, Thierry Pieton, told journalists on a conference call.
The fall in EV demand, increased competition from China and market volatility were complicating Renault's plans to list Ampere, according to media reports.
The listing would have been a bright spot for the stock market after a poor 2023 due to rising interest rates.
Last year's IPO market had the lowest levels of activity since 2016, but bankers had hoped for a potential revival if borrowing rates started to fall.
Published January 30th, 2024 at 11:11 IST