Struggling Japanese components maker Akebono Brake Industry said it would end operations at six manufacturing plants in Japan and overseas as part of a restructuring plan designed to rebuild the ailing business.
The heavily indebted company said its turnaround plan was approved by creditors at a meeting this week where they also agreed to forgive JPY52bn (US$482m) of debt to help reduce interest costs and improve cash flow.
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This represents close to half of the company’s overall debt.
The Toyota affiliated company’s largest clients include Toyota Motor itself, as well as Nissan Motor and General Motors in the US.
Under the turnaround plan, Akebono will close or sell one factory in Japan by 2022, the Sanyo Manufacturing facility in Okayama Prefecture, and five overseas facilities, resulting in the potential loss of 3,000 jobs or one third of the group’s workforce.
By 2021, three factories will be sold or closed in the US, the key market where much of Akebono’s business slowdown has taken place.
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By GlobalDataThis will leave just a single factory in the country.
Two will be sold or closed in Europe, in France and in Slovakia, while R&D facilities will also be closed in the UK and Germany.
Japan Industrial Solutions, a local public-private rescue fund backed by MUFG Bank, Mizhuo Bank, Sumitomo Mitsui Banking Corporation and the government-owned Development Bank of Japan, will inject an additional JPY20bn to help fund its restructuring and recovery plan in return for further equity in the company.
