Fitch raises Renault

Fitch Ratings said it upgraded Renault SA's long-term issuer default rating to BB+ from BB.

“The upgrade reflects the strengthening of Renault's profitability and balance sheet flexibility following its strategic plan update. We forecast that Renault's automotive EBIT will be above 3% in our four-year forecast horizon, which is above our positive rating sensitivities and the 2% median in our navigator for the BB rating category,” Fitch said in a press release.

“Fitch expects the announced Ampere IPO (together with the associated sale of a minority stake) and potential Nissan share sale will provide additional cash proceeds that would support a rapid electrification transition for Renault. As guided by management, we expect most of the disposal proceeds to be used for investment in the business, which should offset our expectations of slightly increasing capex in the next four years,” the agency added.

The outlook is stable.

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