Renault is selling around 5% of its stake in partner Nissan Motor., offloading the stock as part of a share buyback by the Japanese carmaker.

The move follows last month’s finalisation of a plan for Renault to reduce its interest in Nissan. The stake sale is valued at around 765 million euros (Rs 6,722) but will result in a capital loss of 1.5 billion euros (Rs 13,182 crore), the French company said Tuesday.

Given that Nissan’s shares are trading below the Tokyo Stock Exchange’s guideline of maintaining a price-to-book ratio above 1, the buyback will “help improve the situation,” said Bloomberg Intelligence analyst Tatsuo Yoshida.

The cash will bolster Chief Executive Officer Luca de Meo’s efforts to get Ampere, Renault’s electric-vehicle and software arm, going as he seeks to split off the unit and list it as a separate public entity as soon as April or May. Nissan has also agreed to invest in Ampere.

Renaulttransferredits 28.4% stake in Nissan into a trust in early November to pave the way for a reduction of its holding. Even so, there will still be lock-up and standstill obligations. De Meo said last month that Renault would begin offloading the stake “very soon” in early 2024, so Tuesday’s announcement was slightly earlier than anticipated.

For Nissan, the buyback is well within the value of cash and equivalents, which stood at ¥1.6 trillion ($11 billion) yen at the end of September. Nissan said it will cancel all acquired shares.

“It’s good news for the stock that Nissan will retire the equivalent of 5% of its outstanding shares,” Yoshida said.

The Japanese carmaker is paying ¥568.5 for each share, the price at the close of trading in Tokyo on Tuesday. While Nissan’s stock has climbed 36% this year, it’s at roughly half of its value from early 2017.