Nissan Motor received a record JPY130bn (US$1.23bn) in state loan guarantees in May from the Development Bank of Japan (DBJ), as part of a larger COVID-19 relief package made available by the government, according to local reports on Monday citing unnamed sources close to the matter.
In March the Japanese government began providing loans, via financial institutions such as the DBJ, to local companies struggling under the impact of the coronavirus pandemic. By the end of July the government-affiliated DBJ issued close to JPY1.8trn in loans on behalf of the government to large and midsized companies across the country.
The loan guarantee to Nissan was part of a JPY180bn support package provided by the DBJ to the automaker to help it weather the global pandemic. But Nissan was the only company to receive a state loan guarantee. Had Nissan gone bankrupt, the government would have had to shoulder 80% of the guaranteed amount, or some JPY100bn.
Nissan’s global sales had already been in decline following the arrest and dismissal of the company’s former chairman and CEO Carlos Ghosn. The automaker made a net loss JPY671.22bn (US$6.3bn) in the fiscal year ending on 31 March 2020, the first full year loss in 11 years.
In the first quarter (April-June) of the current fiscal year Nissan reported a 48% year on year drop in global sales to 643,000 units, while booking a net loss of JPY286bn.