Renault cuts stake in Volvo to help reduce debt

French carmaker Renault on Wednesday announced the sale of a large chunk of its 21.7 percent stake in Swedish truckmaker Volvo AB, cutting it to 6.8 percent to help reduce debt.

Renault said the proceeds from the private share placement to institutional investors would help bring net debt to below 3 billion euros ($4.16 billion), from 4.6 billion, in line with previously announced targets.

The news was not a big surprise as Renault has previously said its stake in Volvo is "not strategic."

The Volvo stake being sold has a value of 29.4 billion Swedish kronor, or 3.1 billion euros, according to Wednesday's market closing price of 97.05 Swedish kronor per B-class share.

The sale covers all of Renault's B shares, leaving A-class shares worth 6.8 percent of Volvo's capital and 17.5 percent of voting rights.

That still leaves Renault as Volvo's biggest single shareholder, ahead of industrial holding company Industrivarden, according to data on Volvo's website.