(Reuters) -Renault said it would sell just over a third of its Korea unit to China’s Geely Automobile Holdings, freeing up capital for the French automaker to invest in its lagging home market and electric business.
Renault is in the middle of multi-year turnaround plan that is aimed at boosting profit margins and splitting its electric vehicle (EV) and combustion engine businesses as it seeks to catch up with rivals such as Tesla and Volkswagen in the race to cleaner driving.
The move to sell a 34% stake in Renault Korea Motors for 264 billion won ($207 million) comes weeks after media reports that Renault, the top shareholder in Nissan Motor, may consider lowering its stake in the Japanese company.
Renault Korea Motors will issue 45.4 million shares at 5,818 won per share to Geely’s unit, Centurion Industries Ltd, the two companies said in a statement on Tuesday.
Renault owned 80% of the unit at the end of last year. The rest was owned by credit card company Samsung Card, which said in December that it intended to sell its stake in the unit but that no details had been decided.
Geely and Renault announced a partnership in January to develop a lineup of hybrid vehicles for the South Korean market and abroad, produced at Renault’s factory in Busan.
The South Korean market, dominated by local champions Hyundai Motor and Kia Corp, has been famously difficult to break into for automakers including General Motors and SsangYong Motor, now owned by India’s Mahindra and Mahindra.
($1 = 1,274.3600 won)
(Reporting by Savyata Mishra in Bengaluru, Sayantani Ghosh in Singapore, and Joyce Lee in Seoul; Editing by Muralikumar Anantharaman and Himani Sarkar)