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State will hold on to majority of Renault shares after sell-off

PARIS - As the French government set in motion the partial privatisation of Renault yesterday, one minister said that only up to 28 per cent of the company would be sold, writes Julian Nundy.

Renault had been slated for a full privatisation when the government of Edouard Balladur came to power 18 months ago, but denationalisation aroused the anger of the unions and left-wing political parties.

Yesterday Mr Balladur and the ministers involved met to discuss setting a date for the sale, which will happen by the end of the year. Gerard Longuet, the Industry Minister, said earlier in the day that 'about 28 per cent' of the company would be sold. With Volvo holding 20 per cent, this would ensure that the state keeps its majority.

Volvo, which scrapped its planned merger with Renault last December because the Swedish car-maker's shareholders feared domination by the French company, bought its share in 1990. It confirmed yesterday that it would sell between 8 and 12 per cent in the flotation.

With a turnover of Fr170bn ( pounds 20bn) last year, Renault made a profit of Fr1bn. Selling 1.8 million vehicles annually, it is the biggest French car and truck manufacturer.