Japanese truck maker Nissan Diesel said on Tuesday that its main banks and major shareholder Nissan Motor would give it 106 billion yen ($US957 million) in financial aid to help its balance sheet, the Reuters news agency reported.
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The report said the announcement was expected after detailed reports of a bail-out had circulated for nearly two weeks, lifting the truck maker’s shares by more than 10% since the first report.
According to Reuters, in the plan, Mizuho Corporate Bank, Mizuho Trust & Banking Co. and Resona Bank will swap 90 billion yen of loans for preferred shares while Nissan Motor will provide 16 billion yen by swapping debt and convertible bonds into preferred equity.
Reuters noted that Nissan Motor owns 22.5% of Nissan Diesel which has raised its revenue forecast for the year to March 2004 by 9.5%, citing strong sales in Japan and overseas, but said it would finish in the red for the year due to special losses associated with the aid package.
The company now expects a net loss of 44 billion yen for the year compared to its previous forecast of a two billion yen profit while, last year, it posted a loss of 3.35 billion yen, Reuters added.
Reuters noted that Nissan Diesel, one of Japan’s weakest truck makers, is struggling under a pile of interest-bearing debt — at 390 billion yen roughly equal to its revenues last year — left over from the bubble years after which Japanese domestic truck demand sank.
The aid package would reduce Nissan Diesel’s debt to around 200 billion yen by the end of this business year next March, the company said, according to Reuters.
The news agency noted that the plan made no mention of French car maker Renault, but added that Nissan Diesel president Iwao Nakamura said that Renault was considering reducing its stake of 22.5%.
The Nihon Keizai Shimbun newspaper reported earlier that Renault had basically agreed to halve its holding, Reuters said.
