Renault buys 26% of Moroccan carmaker's state owned shares

The French Group Renault and the Moroccan government signed on Thursday the cession contract under which Renault buys 26% of the state's shares in the Moroccan carmaker SOMACA, for 65 million dirhams (nearly $6.5 million).

The cession is part of an overall agreement to sell all of the state-owned shared in Somaca (38%) to the French car-maker. In November 2005, Renault will pay for the remaining 12% shares (72,000 shares) and start making its family car "L90" in SOMACA. The L90 project will cost Renault another 220 million dirhams (about us$ 22 million). It ambitions to produce 30,000 vehicles by 2007, half of which will be exported.

The transaction between the Moroccan state and Renault will yield 95 million dirhams ($10 million) of privatization receipts and is part of Morocco's industrial development scheme, a release from the department of finance and privatization said. Other shareholders in Somaca capital are Italy's Fiat auto and French Peugeot which hold each 20% of SOMACA capital and private investors (14%).