Nissan Motor has requested a US$4.6bn commitment line from major lenders to cushion the impact of the coronavirus pandemic while it seeks to engineer a desperately needed turnaround, people with knowledge of the matter told the Reuters news agency.
As the virus decimates car demand and disrupts production across the industry, Nissan is particularly vulnerable, still reeling from sharp drops in profits after decades of aggressive expansion as well as management chaos due to the scandal surrounding ousted leader Carlos Ghosn, the news agency noted.
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Nissan is requesting the JPY500bn in funding given the possibility the impact of the coronavirus on production and demand could continue for an extended period, one of the Reuters sources said.
The amount has not been finalised, a second source said.
A Nissan spokeswoman told Reuters the company had enough cash for its current business operations but the automaker was looking at various options to prepare for a possible crisis. She declined to comment further.
Nissan's new CEO Makoto Uchida has been tasked with delivering an aggressive recovery plan next month after the automaker's board deemed an earlier plan by his predecessor to cut 10% of the company's global work force as insufficient to ensure the company's survival.
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By GlobalDataIn February, Nissan posted its first quarterly net loss in nearly a decade, and for the year ended March operating profit was expected to plunge 85% to JPY49bn ($450m), according to a Refinitiv Smart Estimate. That would be the lowest amount since a loss posted in the year ended March 2009 during the global financial crisis.
As of December, its automotive operations had negative free cash flow of JPY670.9bn, an increase of nearly seven times from a year ago. Net cash for its automotive business was JPY847.5bn with Nissan having burned through nearly 40% of net cash over the year, Reuters said.
The Nikkei business daily reported Nissan was seeking the commitment line from Mizuho Financial and two other major commercial banking groups, as well as from the government-backed Development Bank of Japan (DBJ). Mizuho and DBJ declined to comment to Reuters.
