Nissan to repatriate cash as Renault tensions brew

Transfer of $1.1b of Chinese unit’s earnings could be done by January end

Nissan Motor Co. plans to repatriate more than $1 billion (Dh3.67 billion) in cash from its Chinese subsidiary — a sign the Japanese automaker is building its financial firepower amid tensions with French partner Renault SA — according to people familiar with the matter,

The transfer of 7.5 billion yuan ($1.1 billion) of the Chinese unit’s earnings could be completed by January end, one of the sources said, asking not to be named because the information isn’t public.

Typically Nissan, which has made cars with China’s Dongfeng Motor Corp. since 2003, reinvests the profit to avoid taxes. Filling its coffers at home would give Yokohamabased Nissan financial flexibility in case the three-way alliance with Renault and Mitsubishi Motors Corp. goes sour.

“Nissan is not planning or undertaking any transfers except those that would ordinarily be made in the course of business,” the company said, declining to comment specifically on whether it is moving money from China. “This notion that this transfer is unusual is baseless,” it said.

Tensions in the FrancoJapanese alliance have surfaced since Carlos Ghosn’s arrest. His legal limbo has left them without the leader who held the two sides together for two decades. While the carmakers have committed to the project behind the scenes, there are suspicions.

The Chinese unit was told in June that Nissan planned to move the funds as a profit distribution, though no schedule was given at the time. The transaction will cost about $100 million in taxes, a source said.

Renault executives quietly seethed over any notion that Nissan may use Ghosn’s exit as a way to alter the alliance’s balance of power. Renault has a 43 per cent voting stake in Nissan, which owns 15 per cent of Renault, and no voting rights. Any attempt by Nissan to unilaterally buy a stake in its partner would be akin to war, a French official has said. Shares of Nissan advanced 1.4 per cent in Tokyo and have lost 6.8 per cent since Ghosn’s arrest. Renault has declined 13 per cent over that span.