[Source: Renault Samsung Motors Co.]
Samsung Group is formally putting an end to its 26-year auto venture with Renault by selling its remaining stake and removing the name from the consigned finished carmaker based in Busan, southern port city of South Korea.
According to investment banking sources on Wednesday, Samsung Card has named Samsung Securities as the lead financial advisor for the sale of a 19.9 percent stake in Renault Samsung Motors. The card issuer is said to have sent out invitations for a tender to private equity funds and other financial investors at home and abroad.
The trademark contract between Samsung Card and Renault Samsung Motors has already expired last year. The carmaker must remove ‘Samsung’ from its corporate name after a two-year grace period in 2023.
Samsung Group advanced into the finished vehicle business in 1995. During the Asian Financial Crisis in late 1990s, the business was sold to French car manufacturer Renault Group and since then Samsung has been receiving dividends and trademark royalty without any involvement in management.
The latest divesture is part of efforts to improve its brand image affected by the car maker’s weak business performance and union strikes for the past three years. Renault Samsung Motors incurred an operating loss of 79.6 billion won ($67.9 million) for the first time in eight years last year, raising concerns about its sale plan.
Samsung Card shares were trading 0.74 percent higher at 34,200 won in Seoul trading at 9:45 a.m. Thursday.
By Seo Dong-cheol, Han Sang-heon and Lee Ha-yeon
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