PARIS: French carmaker Renault will sell a tranche of around 5% of its stake in Japan’s Nissan as part of a wider rebalancing of the two companies’ long-standing alliance, Renault said in a statement on Tuesday.

The sale will be implemented as part of a share buyback program announced by Nissan, and is to be executed on Wednesday, Renault said.

Renault and Nissan finalised at the end of July the terms of a restructuring of their alliance after months of negotiations, aiming for a downsized, but more pragmatic and agile partnership. Renault currently holds 28.4% in Nissan but it pledged earlier this year to significantly reduce its stake.

Renault announces plans to cut its vehicle production costs

After the deal is fully executed, the two carmakers will continue to hold mutual shareholdings of 15%. The French company on Tuesday estimated that, based on the current Nissan share price, the first share disposal is worth 765 million euros ($824.29 million).

The sale would lead to a capital loss on disposal of up to 1.5 billion euros, which Renault would account for in its annual financial report outside operating income.

Nissan said in a separate statement that the move was “in line with Nissan’s commitment to enhancing shareholder returns and capital efficiency”.